THE FINALITY OF ARBITRAL AWARDS AND LIMITS OF JUDICIAL INTERFERENCE

The Position of Law is that where parties voluntarily submit their dispute to arbitration, the resulting arbitral award is final and binding upon them. Courts are not appellate bodies over arbitral tribunals and will only interfere where a party establishes recognized statutory grounds such as lack of jurisdiction, misconduct or breach of fair hearing. Mere dissatisfaction with the findings of the arbitrator is not a ground for setting aside an arbitral award.


For more clarity on the topic, I’ll be making reference to the recent case of NICON INSURANCE LTD. v. BRIGHTHOUSE ESTATE LTD. (2025) 8 NWLR (Pt. 1993) 469.
A brief narration of the fact of the case is that: 


The applicant and the respondents are parties to an agreement with an arbitration clause. A dispute between the parties was referred to arbitration, and an award was entered in favour of the respondent.
The applicant applied to the High Court to set aside the award. The applicant asserted lack of jurisdiction of the arbitrator on the basis that conditions precedent for invoking the arbitration clause in relation to the indemnity clause of the agreement had not arisen. The applicant also complained about misconduct by the arbitrator. 

The High Court found and held that the arbitrator had jurisdiction. It also found and held that the applicant failed to provide sufficient materials to show any case of clear misconduct by the arbitrator. Consequently, the High Court refused the application.


Dissatisfied with the decision of the High Court, the applicant appealed to the Court of Appeal where it raised two issues. The first issue was whether the High Court rightly refused to consider and determine the jurisdiction of the arbitral tribunal to grant the award and rightly recognised the arbitral award. The second issue was on whether the Court of Appeal did not err when it held that the sole arbitrator did not misconduct himself by considering issues outside the agreements between the parties.


The Court of Appeal considered the evaluation of facts and evidence by the High Court. On the issue of jurisdiction, the Court of Appeal found and held that the cause of action had crystallised, that the arbitral proceedings were not premature and that contrary to the applicant’s case, the High Court considered and determined the issue of jurisdiction of the arbitral tribunal in the grant of the award. The Court of Appeal also found that the High Court considered and made findings on whether the tribunal went outside its scope concerning the agreement between the parties. The Court of Appeal held that there was no misconduct by the arbitrator and that the High Court rightly made the award in question. Therefore, the Court of Appeal resolved the two issues against the appellant and affirmed the ruling of the High Court.


Still dissatisfied, the applicant filed an application for leave to appeal to the Supreme Court on grounds of facts or mixed law and facts; and for stay of execution of judgment at the Court of Appeal.


But time for the hearing of its application elapsed owing to the busy docket of the Court of Appeal. So, the applicant filed another application at the Supreme Court for extension of time within which to seek leave to appeal to the Supreme Court on grounds of facts and or mixed law and facts; leave to appeal on grounds of facts and or mixed law and facts; extension of time within which to appeal; and stay of execution of the judgment of the High Court and the judgment of the Court of Appeal pending the hearing and determination of the applicant’s appeal.


Among other grounds for the application, the applicant stated that its proposed six grounds of appeal (which were exhibited in support of the application) were substantial, arguable, and touched on the jurisdiction of the arbitrator; and that if the respondent was allowed to execute the judgment, it would overreach the applicant. The respondents opposed the application. They argued that the applicant failed to present sufficient material before the Supreme Court to satisfy it for the grant of the leave sought. The respondents further argued that the applicant’s proposed grounds of appeal challenged the final decisions of the sole arbitrator on his jurisdiction though the cause of action presented to the arbitrator had accrued.


Additionally, the respondent argued that the applicant did not fulfill the conditions for grant of stay of execution, and that the grant of the applicant’s application would amount to frustrating the mutual intention of the parties. In the alternative, the respondent argued that if its plea was refused, the judgment sum and accrued interest on it as computed by a firm of Chartered Accountants should be deposited with the Chief Registrar of the Supreme Court who shall in turn deposit it in a viable commercial bank in Nigeria to await collection by the successful party in the appeal.


In determining the appeal, The Supreme Court held that:


“Parties, as in this case, who refer any disputes arising from their legal relationship to arbitration clearly intend to avoid other usual or ordinary ways or methods of settling disputes, such as litigation in ordinary courts which involves cumbersome procedures, unimaginable delays, expenses and general inconvenience.”
Arbitral awards are not the usual or ordinary decisions/judgments delivered by the ordinary or normal courts established by Law, but outcomes of proceedings and decisions by people or institutions freely and voluntarily chosen specifically by the parties in the course of their agreements/contracts that are fiduciary in nature, to, in the event of any dispute arising from such relationship in which, very often, time is of essence, expeditiously and with relative ease, settle it conclusively to bind them.
The Supreme Court further held thus:
“Since an arbitral award arises from a determination of dispute(s) by an arbitrator freely and mutually chosen and appointed to determine same by the parties to the dispute, the parties who fully participated in the proceedings without objection, should accept and abide by such an award even if they do not like it because it did not go in their favour.”
 

They should be frank and sincere in their attitude towards such awards and should be discouraged from turning arbitral proceedings into a pre-litigation or an elongated litigation procedure for the sole purpose of frustrating and eventually defeating the primary purpose of such proceedings freely chosen by them. It defeats the purpose of an agreement to refer a dispute to arbitration if after fully participating therein, a party is allowed to raise technical objections to defeat the award. Put differently, where parties to a dispute have voluntarily submitted themselves to an arbitrator on the complaint raised, it would be unjust for one party to challenge it on its face.


Therefore a party who agrees to arbitration should understand that arbitration is generally the final stop in the dispute resolution process. Once an award is delivered, the Court will not revisit the merits of the dispute merely because one party believes the arbitrator reached the wrong decision. Only serious procedural defects or recognized statutory grounds such as can justify judicial intervention.




About the Author: 
Mukhtar Abdulrauf, ASHATI, is a Certified Mediator at the Settlement House of Alternative Training Institute (SHATI), He is also a member of the Research and Litigation Directorate, Solace Chambers, Bayero University, Kano. He can be reached via 07075173626.