Annulment versus enforcement of arbitral awards in Nigeria: a narrower path for courts under the Arbitration and Mediation Act 2023
Matthew Burkaa SAN
Matthew Burkaa & Co., Lekki, Lagos
reception@matthewburkaalaw.com
Introduction
Parties choose arbitration because they want a dispute resolved on their terms: timeously, privately, and without a judge re-litigating what a tribunal has already decided. That bargain only holds if the resulting award can actually be enforced, and if courts resist the temptation to second-guess it. The Arbitration and Mediation Act (AMA) 2023, which replaced the Arbitration and Conciliation Act of 19881, was built around this idea. It narrows the grounds upon which a Nigerian court can intervene and set aside an award. It equally sets a strict deadline for challenging arbitral awards and creates an internal review mechanism that keeps many disputes out of the courtroom altogether.
Annulment versus enforcement
Lawyers sometimes talk about “annulment” and “enforcement” as if they sit on the same spectrum. They do not. Annulment sets an award aside, and only the courts at the seat of arbitration have that power. Enforcement recognises the award and puts the machinery of the state behind it, and it can be pursued wherever the losing party holds assets.2 A party can lose an annulment application at the seat and still watch the same award enforced somewhere else entirely. The two tracks run on different rules, before different courts, for different reasons, and the AMA treats that separation as one of its organising principles.
Annulment is not an appeal. A judge asked to set aside an award cannot revisit the merits, reweigh the evidence, or decide whether the tribunal reached the “right” result. The Court of Appeal in Nigeria made the point firmly in Stabilini Visinoni Ltd v Mallinson & Partners Ltd, holding that a court does not sit as an appellate court over arbitrators and has no business hunting for reasons to frustrate an arbitration the parties chose for themselves; the court’s only role is to ensure the arbitrators complied with the law as they perceived it, as stated on the face of the award.3 Section 64(1) of the AMA gives that restraint statutory teeth: “A Court shall not intervene in any matter governed by this Act, except where it is provided in this Act.” A court’s duty is to police the process, not referee the substance.
Limited grounds, tight deadline
Where annulment does apply, Section 55(3) of the AMA confines it to a short, closed list, namely: a party lacked legal capacity; the arbitration agreement was invalid; a party was not given proper notice of the tribunal’s appointment or could not present its case; the tribunal decided matters outside its mandate; or the subject matter is not arbitrable under Nigerian law, or the award offends public policy.4 The wording tracks Article 34 of the UNCITRAL Model Law almost exactly. The Act goes further than the old law by also requiring the applicant to show the defect caused, or will cause, substantial injustice, a real hurdle and not just a box to tick.5
The three-month timeframe is one of the most significant procedural innovations of the Act. A party intending to challenge an award must serve written notice of that intention within three months of receiving it.6 Once the applicant misses the window, the award stands. This is based on the reasoning that commercial disputes are supposed to end, accordingly, the AMA is built to make sure they do.
Jurisdiction and the default to enforcement
As much as timing, seat also matters in annulment. Only the courts of the arbitral seat may annul an award, so a Nigerian court asked to set aside a foreign-seated award has no jurisdiction to do so in the first place. The Court of Appeal applied that principle in Oil & Industries Services Ltd v Hempel Paints (South Africa) Pty Ltd, by declining to annul an award made outside Nigeria on the justification that supervisory authority belongs to the seat, not to wherever a losing party happens to bring its complaint.7 The drafters of the AMA were clearly reacting to decisions like Baker Marine (Nig) Ltd v Chevron (Nig) Ltd, in which Nigerian courts set aside two awards in the 1990s for reasons (including how the tribunal weighed evidence and calculated damages) that read more like an appeal than a review. The Supreme Court affirmed that outcome in 2006, but commentators abroad have cited the case ever since as exactly the kind of merits-based interference the new Act is designed to foreclose.8 Moreover, even in respect of Nigeria-seated arbitrations, where Nigerian courts have jurisdiction to set-aside awards, courts are still cautioned to exercise restraint. This was the position in NNPC v Fung Tai Engineering Co. Ltd, where the Supreme Court warned that courts should rarely interfere with arbitral awards, unless there is an obvious error in the proceedings.9
If a Nigerian court cannot touch a foreign award, the only route left for a dissatisfied party is to resist its enforcement, and there too the bar sits high. Enforcement in Nigeria draws on the New York Convention 1958, to which Nigeria is a party: recognition and enforcement follow more or less automatically unless the resisting party can make out one of a short list of statutory objections.10 Courts are directed to deal with enforcement applications promptly and are cautioned not to reopen the underlying dispute. The burden sits with the party resisting enforcement, not the party seeking it.
Award Review Tribunal and asset protection
One of the most notable additions to the AMA is the Award Review Tribunal. Parties are at liberty to agree, before or after an award is made, to route any challenge to a second arbitral panel rather than to a court.11 That panel can confirm the award, vary it, set it aside in part, or issue a fresh one. Once it has ruled, a court’s remaining role shrinks to the narrowest grounds of all: non-arbitrability and public policy.12
It is an attractive option for parties who want a specialist, confidential second look without surrendering the dispute to litigation.
The AMA also takes asset dissipation seriously. Courts can now recognise and enforce interim measures ordered by a tribunal: freezing injunctions, orders preserving assets or evidence, and other steps aimed at making sure a winning party has something left to collect.13 An award that cannot be executed is worthless, and this part of the Act is squarely aimed at closing that gap.
Conclusion
The innovations discussed in this paper have aligned the Nigerian arbitration law with the present global trend on arbitration and international best practice, with courts that supervise lightly, enforce readily, and leave the question of the merit or otherwise of the award to the Arbitrators chosen by the parties to decide. For counsel advising on Nigerian-seated arbitration, the practical upshot is simple. Annulment is now a narrow, fast-closing door, while Enforcement is the default. Clients should plan around that reality from the moment a dispute looks headed for arbitration, not after an unfavourable award has already been made.
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1 Arbitration and Mediation Act 2023, s 90 (repealing the Arbitration and Conciliation Act, Cap A18, Laws of the Federation of Nigeria 2004).
2 Arbitration and Mediation Act 2023, ss 55, 57-58; Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) 1958, art V.
3 Stabilini Visinoni Ltd v Mallinson & Partners Ltd (2014) 12 NWLR (Pt 1420) 134 (CA).
4 Arbitration and Mediation Act 2023, s 55(3).
5 Arbitration and Mediation Act 2023, s 55(5).
6 Arbitration and Mediation Act 2023, s 55 (4).
7 OIS Industries Ltd v Hempel (Nig) Ltd (2025) LPELR-81602 (CA).
8 Baker Marine (Nig) Ltd v Chevron (Nig) Ltd, S.C. 374/2001, [2006] NGSC 105 (8 June 2006).
9 NNPC v Fung Tai Engineering Co. Ltd. (2023) 15 NWLR (Pt. 1906) 117.
10 Arbitration and Mediation Act 2023, ss 57-58; New York Convention 1958, arts III-V.
11 Arbitration and Mediation Act 2023, s 56.
12 Arbitration and Mediation Act 2023, s 56(9) and related provisions.
13 Arbitration and Mediation Act 2023, ss 19-29(Part III); UNCITRAL Model Law, arts 17-17J.