MY TAKE ON THE ALLEGED PROSCRIPTION OF IPOD

Much has been said about the alleged proscription of Indigenous People of Biafra (IPOB). No less a personality than the President of the Nigerian Senate, Dr. Bukola Saraki, has also weighed in on this issue. The issue has therefore become very controversial with divided opinions.

The governing law on proscription of organisation engaged in terrorism is Terrorism (Prevention) Act 2011 (as amended). Section 1(1) of the Act prohibits terrorism while 1 (2) defines activities that are classified as acts of terrorism. Section 2 provides for the process for proscribing organisations involved in acts of terrorism.

Two pronouncements from government authorities on Friday 15th September have led to the swell of opinions on the status of IPOB and legality or otherwise of those pronouncements.

Firstly, the Nigerian army in a statement by Maj.-Gen. John Enenche, the Director, Defence Information (DDI), said that the IPOB posed security challenge and had been metamorphosing from one stage to another and concluded by confirming that IPOB was a terrorist organisation. Quoting from the statement, it reads “After due professional analysis and recent developments, it has become expedient to notify the general public that the claim by IPOB actors that the organisation is non-violent is not true. Hence, the need to bring to public awareness the true and current state of IPOB. In this regard, some of their actions, clandestinely and actively, that have been terrorising the general public include: The formation of a Biafra Secret Service, claimed formation of Biafra National Guard, unauthorised blocking of public access roads and extortion of money from innocent civilians at illegal road blocks. Militant possession and use of weapons (stones, molotov cocktails, machetes and broken bottles, among others) on a military patrol on Sept. 10, 2017. Physical confrontation of troops by Nnamdi Kanu and other IPOB actors at a check point on Sept. 11, 2017 and also attempt to snatch their rifles. Attack by IPOB members on a military check point on Sept. 12, 2017, at Isialangwa, where one IPOB actor attempted to snatch a female soldier’s rifle. From the foregoing, the Armed Forces of Nigeria wish to confirm to the general public that IPOB from all intent, plan and purpose as analysed, is a militant terrorist organisation’’. Note, nowhere was the phrase “declare” or “proscribe” used.

Shortly after this, the governors of the South- east zone of the country rose from a meeting and announced that they have proscribed the “activities of IPOB”. In their communiqué, they announced that: “In view of the prevailing security situation in the South-East and its attendant consequences, the South-East Governors hereby resolved as follows:

“All the activities of IPOB are hereby proscribed. IPOB and all other aggrieved groups are advised to articulate their position on National issues and submit to the committee of Governors, Ohanaeze Ndigbo and National Assembly members from the South-East zone through the Chairman of South-East Governors Forum”. (emphasis mine).

It should be noted that neither the statement from the army nor the communiqué of the governors proscribed IPOB. While the governors merely proscribed the activities of IPOB, it did not proscribe IPOB. In similar vein, the army statement did not use the word “proscribe” or “declare”. It merely warned the public that, going by the activities that IPOB started carrying out; it was a militant terrorist organization. That being the case, the controversy generated by the alleged proscription is needless.

On legal steps for proscribing organisations involved in acts of terrorism, Section 2 of the Terrorism (prevention) Act, clearly provides:

(1). Where two or more persons associate for the purpose of or where an organization engages in –

(a) Participating or collaborating in an act of terrorism;

(b) Promoting, encouraging or exhorting others to commit an act of terrorism; or

(c) Setting up or pursuing acts of terrorism, the judge in Chambers may on an application made by the Attorney General, National Security Adviser or Inspector General of Police on the approval of the President; declare any entity to be a proscribed organization and the notice should be published in official gazette.

(2) An order made under sub-section (1) of this section shall be published in the official gazette, in two National newspapers and at such other places as the judge in Chambers may determine.

It is conceded that the pronouncement from the army and the governors did not follow this process. However, since the statements did not claim to be proscribing the organization called IPOB, the issue of their compliance with Section 2 is irrelevant. That discussion is merely an academic exercise. What they did at best was to proscribe activities of IPOB, not IPOB itself. In fact, the army has come up with a new announcement that they did not declare IPOB as a terrorist organization.

In my view, what happened was a coordinated effort by the authorities (the army and the governors) to stem the tide of violence and lawlessness going on in the region. It was to preempt a break down in law and order, that was dangerously degenerating into inter-tribal attacks and killings, similar to what happened in Rwanda some years ago. I think the authority could ill-afford the possible delay and lack of surprise element that following the constitutional process of proscription will engender. The scenario the army and governors tried to prevent can be likened to the following anecdote from my good friend, Obinna Anaba:

I employ my gateman, Umaru. I pay Umaru to guard my house. I even arm Umaru with whistle, bow, arrows and small jazz to make him effective – sight, catch and eliminate any thief man! Then this Saturday, agile Umaru sights a man scaling my fence and dutifully goes after the intruder blowing his whistle and setting his bow and arrow for the kill! Yours truly suddenly jumps out of bed. No No No Umaru. You can’t do that. You don’t have the powers to declare the intruder a thief. No! I have to convene a meeting of my household in the morning and we will determine whether or not he is a thief. Then we can allow you go after him.

Subtext: Umaru has resigned. His reason. My Oga, that’s me, is a very stupid man.

From the analysis above, what the army and the governors did, in my view, did not amount to acting illegally or unconstitutionally, as they did not proscribe IPOB. Rather, they did what any responsible government will do to safeguard lives and properties, giving the fast degenerating situation. They were able to douse the tension and fear created and stopped the wanton destruction of lives and properties that was already taking place in the south east and possible reprisal attacks in the northern part of the country. To back up the action taken, it is being speculated in the news media, at the time of writing this article, that the Nigerian President, General Muhammadu Buhari, has now given approval to the Attorney-General to take action to formally proscribe IPOB, in line with the provision of the Terrorism (Prevention Act).

NIGERIA’S CORPORATE EXISTENCE UNDER CHALLENGE

Nigeria’s corporate existence as a nation is under serious challenge, especially with two major events from two major ethnic groups. We have agitation for secession from the east, sometimes accompanied with hate messages for those from the other parts of the country and threats of violence/war. From the north, there has come a quit notice to the easterners to leave. One may wonder whether if those leading this face-off are actually speaking the minds of those they claim to represent.
The twin events of angry outbursts mentioned above have precipitated urgent efforts to enhance unity and peaceful coexistence, which is especially being led by the acting President, Yemi Osinbajo.
The question being asked is what has led us to where we have now found ourselves. The common answer of many is: injustice and absence of equitable treatment. This relate mainly to share of common resources and availability of opportunities.
Like it should be expected, the situation has sparked off discussions around the country. In all these, three major threads have emerged on how to ensure peaceful coexistence.
– One is a call for referendum to be included in our laws to enable people to exercise their right of self-determination.
– Another is a call for restructuring of our federal system of government, including fiscal federalism – essentially to devolve more powers and resources to the units and make the central government to handle only few issues that are central in nature such as external affairs, currency, armed forces.
– Yet another view is that secession or restructuring without more will not solve our problem. The main solution is good governance by those in authority. To some, with good leadership and accountability, the demand for secession and restructuring will die down. Good governance can only be achieved if every citizen get involved, especially in calling to account those we have chosen to lead us.
Whichever way forward we choose, it is important that we have peace in navigating this challenge.
Sesan Akinsanya
www.bonitassolicitors.com
https://www.linkedin.com/in/sesanakinsanya

OVERCOMING LEGAL CHALLENGES DURING RECESSION

It is official. Nigeria is now in recession. Recession is a technical term used in describing a period of temporary economic decline during which trade, economic and industrial activities are reduced, generally identified by a fall in GDP in two successive quarters. According to the Nigeria Bureau of Statistics (NBS) gross domestic product (GDP) report for the second quarter of 2016, Nigeria’s economy contracted by 2.06 percent to record its lowest growth rate in three decades. In the first quarter of 2016, the NBS said the economy shrank by 0.36 percent to hit its lowest point in 25 years, hence the official confirmation of recession.

It has always been obvious that Nigeria has been in recession before official confirmation. Even when Nigeria rebased the economy and celebrated being the leading African economy, overtaking South Africa in the process, the impact could not be seen on the average man on the street. Our years of economic mismanagement and directionless governance have finally caught up with us.

The present recession situation is a culmination of persistent and consistent misrule by our former leaders. The unbridled looting of treasury, inconsistent policies, unfocused governance all combined together to get us to where we are today. All these have been exacerbated by the falling oil prices and oil production disruption by the Niger Delta militants, which a mono product economy like Nigeria can ill-afford.

Faced with this dire situation, businesses and individuals have to devise new strategies for survival. For businesses, there are key legal issues that are related to a period of recession that they will have to deal with. In recession, broad areas of focus are cost reduction and possible increase in revenue. In doing this, business relationships and stakeholder interests are invariably impacted. Many of these impact and relationships disruption have legal implications for the business. We will examine some of these and how they can be managed.

One main issue during recession period is non-willingness of parties to abide to the terms of a contract they freely entered into when the going was good. Breaches of contract terms go northward. It is important that actions businesses take in response to such breaches do not lead to further throwing away scarce resources in chasing hopeless situation. Such breaches can involve any contractual relationship, including contracts with suppliers, customers and other service providers. To get optimal solution in such situations, businesses will need to work closely with their professional advisers, particularly lawyers and accountants. A stitch in time saves nine. Early involvement of your lawyer would help in managing scarce business resources in the most prudent way.

One key option during recession is re-negotiating contracts terms, in the face of new reality confronting contract parties. Contract entered into in the period of boom may not be suitable in a period of recession. Parties therefore need to engage each other to renegotiate contract terms in a way that is mutually beneficial. During such renegotiation, you need the support of your lawyer to ensure that you do not sell yourself short.

Recession often comes with the forced need to embark on cost cutting. Typically, some areas targeted for cost reduction impact on staff take-home and welfare. Discussion around this often lead to conflicts and disputes because of interests differences. This need not be, if well managed. Involving your legal team can help smoothen the process. Proper legal advise can help in preventing dispute or where dispute arises, can go a long way in resolving it amicably.

During recession, purchasing power generally goes down due to accompanying inflation. Generally, people are desperate to make ends meet. Crime and other social vices go on the increase. Communities in business operational areas become more restive. In such situations, lawyers who are savvy in dispute resolution can help with appropriate legal support and advice to enable businesses navigate through the rough times without suffering further depletion of resources.

Other areas that a good legal support can provide succour include management of receivables, regulators relationship management, corporate governance practice and ethics.

The main key to effective management of legal issues arising during recession is early involvement of your lawyer. Prevention is better than cure. That saying is more relevant during the challenging times of recession. Therefore, early involvement of your lawyer is essential. Resources are scarce and therefore need to be optimally managed. A good legal support and advice will surely help in doing this. When you involve your lawyer early, you spend less and can prevent huge and higher cost that may arise when the damage has been done, when you may now have to endure expensive dispute, which may include litigation.

HOW DO YOU SEE YOUR LAWYER – ANGEL OR DEVIL?

 

Do you see your lawyer as a dear friend that you can approach to seek comfort when you are facing difficult challenges? Or you see your lawyer as a necessary evil that you will avoid like a plague, if you are not compelled by circumstances? Has he become, as in the eyes of many, a mere necessary evil rather than a force for positive change.

Is your lawyer the trusted ally that you confidently involve and rely on to see you through important decisions? Or do you see him as someone not to be involved in your decision-making because involving him makes decision-making more complicated and cumbersome?

Do you see your lawyer as that knowledgeable and learned professional to be relied on for wise counsel? Or do you regard his claim to being the ‘learned’ one as undeserved and your reference to him as the learned one is with tongue in cheek?

Below are some jokes about lawyers. Though they are supposed to be jokes, listening to them, one cannot escape the feeling that the society has a negative and wrong perception of who a lawyer ought to be.

Joke 1

During the mid-1980s dairy farmers decided there was too much cheap milk at the supermarket. So the government bought and slaughtered 1.6 million cows. How come the government never does anything like this with lawyers? – P.J. O’Rourke

Joke 2

Lorenzo Dow, a 19th century evangelist, was on a preaching tour when he came to a small town one cold winter night. At the local general store he saw the town’s lawyers gathered around the potbellied stove.

Dow told the men about a recent vision in which he had been given a tour of hell, much like the traveler in Dante’s Inferno. One of the lawyers asked what he had seen.

“Very much what I see here,” Dow said. “All of the lawyers gathered in the hottest place.”

Joke 3

Curious, a pedestrian approached the man. “The first hearse carries my ex-wife’s lawyer,” the man explained. “My dog bit him and he died two days later. The second hearse has a lawyer who opposed me in some business litigation. He met the same fate.”

The pedestrian thought for a moment, and then asked, “Could I borrow your dog?”

“Okay be me, but you’re going to have to wait your turn like these other people.”

Worryingly, all the jokes above concluded with evil wishes for lawyers. It is also not unusual to hear the phrase “lawyers are liars” being dropped casually in friendly conversations between lawyers and non-lawyers. All over the world, there is this general seeming hostility towards lawyers. The question arises, therefore, why this seeming general dislike for lawyers? Do conducts of lawyers contribute to this hostility? What role do lawyers play in contributing to societal enhancement? Are lawyers role positive or negative? Do we really need lawyers?

Not less a personality than the President of Nigeria, Mohammadu Buhari, has expressed frustration about lawyers and the judiciary, especially regarding the anti-corruption crusade of the federal government in Nigeria. Not long ago, while declaring open the 2015 All Nigeria Judges’ Conference in Abuja, Buhari accused corrupt lawyers and judges of sabotaging his efforts to recover stolen assets. In his address to the judges, Buhari lamented: “As my lords are undoubtedly aware, corruption transfers from public coffers to private pockets, resources required to deliver social and economic justice.

“Government’s attempts to recover such assets in accordance with the law are often faced with dilatory tactics by lawyers sometimes with the apparent collusion of judges.

“These tactics are often not directed at reaching any conclusion or affirming innocence or guilt, but at stalling trials indefinitely, thus denying the state and the accused person the opportunity of a judicial verdict. I wish to echo the sentiments of the vast majority of Nigerians in saying that we cannot afford to continue on this path.

“Unfortunately, our justice system currently has a reputation for delays, usually occasioned by a combination of endless adjournments, incessant interlocutory applications and overwhelming caseloads. This situation is a huge disincentive for businesses.

“It is not surprising, therefore, that Nigeria ranks near bottom on the ease of doing business index”.

Similar sentiments have been expressed by the generality of Nigerians, especially, on cases involving elections and corruption allegations. Lawyers and judges have been accused of being deeply involved in bribery and corruption.

Common complaints about lawyers include use of dilatory tactics and technicalities in stifling smooth trial of cases, use of injunctions to delay trials, use of frivolous arguments to frustrate trials; preparation of false documentation, charging excessive fees, conversion of clients’ money, among others. These complaints, as serious as they are, should not be the basis of passing blanket judgment on all lawyers. If anything, these are conducts that the legal profession stands against and for which lawyers engaged in them are regarded as renegades. The acts of the few bad eggs, is therefore not enough and should not be generalized to tar all lawyers as enemies of the society.

In any society, lawyer’s roles are important and positive. The lawyer is the guardian and promoter of the rule of law, justice, fairness and equality of all before the law. This role is especially important in the developing countries where the law has the potential to become the great levelers between the powerful and the less so. Lawyer’s obligation is not limited to his client, but goes further to include the court, the public in order to secure proper administration of justice in the society.

There are many other roles, which the lawyers play in the society. In a dispute situation or trial, a lawyer is like a spokesperson hired to speak for a client to settle a conflict. A lawyer can often communicate more effectively than the client because the
lawyer is not emotionally involved in the dispute and has been trained to look for ways to settle a dispute by using the legal knowledge he or she has gained.

Beyond representing clients in disputes, a lawyer sometimes perform the role of advisor or counselor to help clients with personal or business problems such as divorce, relationships between parents and children, drafting wills, drafting contracts and other matters. In this role, the lawyer must seek to meet the desires of the client while providing practical advice to accomplish their goal.

Often, the lawyer serves as a negotiator working with the client as well as the opposing side to find the best way to settle a conflict. This is a difficult role, as the lawyer must be able to find compromises and to know the right moment to present these to reach the best settlement for the client. Negotiation is a skill that requires experience and patience on the part of the lawyer.

There is a common and popular misconception of lawyers as mainly those only to be consulted when you are involved in litigation. Many people wrongly see lawyers as those only to be involved when you are initiating a case in court or you are being sued. Litigation is only a part, albeit the most popular, of the legal profession. Lawyers are advisors and counsel in all spheres of life. Law practice, both litigation and advisory, covers so many areas, hence we have so many practice specialties. Examples include Business Law, Commercial Law, Shipping and Maritime Law, Aviation Law, Oil and Gas Law, Family Law, International Law, Arbitration and Alternative Dispute Resolution, to mention just a few. Any wonder then why lawyers are referred to as the learned gentlemen.

The profession of law is still the noble profession. Just like there are deviants in any group or society, there are lawyers whose conducts may be contrary to the ethics of their profession, which should not be seen as what the profession stands for. As observed earlier, many of the allegations of misconduct against lawyers happen in litigation practice but there are the bigger majority of lawyers, many of whose areas of practice are different from litigation and who are not focus of these allegations. Many are in-house counsel while many others are involved in commercial and corporate practice. Domestically and globally, many lawyers are known to have made indelible contribution to societal growth. Global names such as Abraham Lincoln, Nelson Mandela and Indira Ghandi are good examples of lawyers known for great contribution to humanity, while in Nigeria we have great names such as Obafemi Awolowo and Rotimi Williams for their positive role.

While the legal profession is always striving to cleanse itself of the few bad eggs, the vast majority of lawyers uphold the value and ethics of the profession. The noble profession of the ‘learned friends and gentlemen’ still remains the honourable profession and the defender of the weak in the society.

 

By SESAN AKINSANYA, LL. B., FCIS, FCA, FCIArb, MCIPS, MIoD

SesanAkinsanya@BonitasSolicitors.com, 08037402564.

REGULATORY COMPLIANCE ENFORCEMENT – IS IMPOSITION OF FINE HARMFUL?

 

The current government of President Muhammad Buhari rode into power on the mantra of change. Given the record of the president when he was a military head of state, many indeed anticipated change immediately APC was declared the winner of the last presidential election. Right before the new government set any policy direction or appointed new ministers, change was being felt all over the country; in anticipation of what actions the government would take. For example, there were sudden improvements in the performance and accountability in some sectors such as power, Petroleum, among others in what was attributed to the reading of the President’s body language. It was not therefore totally unexpected that there would be improvement in enforcement of regulatory compliance by various regulating agencies and their personnel. What came as a surprise is the gusto with which these agencies are now performing their roles and the extent of penalties they are willing to impose on violators? This is especially so, given the era of impunity that was the hallmark of the immediate past administration.

Recently, Telecom giant MTN Nigeria was fined a record $5.2bn (approximately N1.04 trillion) by Nigerian Communications Commission (NCC). According to NCC, MTN was fined for non-compliance with a deadline set by the NCC for all GSM operators to disconnect all non-registered sim cards. Also recently, a fine of US$5million was imposed on Guinness by National Agency for Food and Drug Administration and Control (NAFDAC) over expired raw materials allegedly found in its warehouse. Also, in line with its threat to sanction commercial banks that failed to comply with the federal government’s directive on the remittance of government revenue to the treasury single account (TSA), the Central Bank of Nigeria (CBN) fined some of the county’s first generation banks – First Bank of Nigeria Limited and United Bank for Africa Plc. reportedly in the sum of about N4.8billion in total.

This new mood of regulatory compliance enforcement has somewhat become controversial and subject for debate on its desirability or otherwise.

MTN’s $5.2 billion fine adds up to nearly a quarter of Nigeria’s national budget for 2015 and it has come at a time when the country needs it most, thanks to the fall in oil prices. Therefore some have argued that the motive for imposition of fines, especially such huge fine imposed on MTN, is more about fund-raising rather than to sanitise the sectors concerned. There were therefore calls on government to reduce the fines or cancel them outrightly. The counter-argument is that the imposition of fines are necessary to send the message that laws and regulations are meant to be obeyed and complied with. Regulators should demonstrate that they could also bite.

Some are also concerned that imposition of huge fines may discourage foreign investors thereby reducing Foreign Direct Investment (FDI). They argue that it will increase the cost of doing business in the country. Some even argue that such imposition casts Nigeria as being desperate. One of those opposed to huge fine is a popular Senator, Ben Murray- Bruce. According to him “ the extent of the fine by the Nigerian Communications Commission is such that it sends a very wrong signal to foreign investors and gives them the impression that Nigeria is in a desperate financial situation due to the sudden drop in crude oil prices and wants to get alternative revenue by any means necessary”.

To my mind, imposition of fines and any other sanction prescribed by any enactment are logical consequences of non-compliance with the law. What is important is for the regulation to be clear on what an infringement is and the consequence of that infringement. Where a fine is to be imposed, the regulation should be sufficiently clear on how the fine is to be computed. Once, the regulation is clear on these aspects, it will be manifestly fair on all concerned when a fine is imposed, even if huge. What is imposed should therefore be paid, unless reversed in line with the law. Everyone should be seen as equal before the law, the weak and the strong, the big multinational and the artisan.

However, despite the availability of clear and fair justification for fine imposition, other overriding factors may compel a second look at what is being imposed. For example, issues such as national security, economic impact, sectorial distabilisation, national interest may warrant a need to outrightly cancel or reduce fine imposed. Indeed, the NCC went on to reduce the fine imposed on MTN by 25%.

Some were aggrieved about the NCC’s decision to reduce the fine and have described it as a violation of a fundamental human right and a breach of some sections of the Nigerian constitution. However, the NCC has defended itself by stating it had had cases in the past where organisations pleaded for leniency on their sanctions and the commission took this into consideration. In the case of reducing MTN’s fine, the commission stated it weighed the pros and cons, focusing heavily on the need to ensure stability in the telecommunication sector. “After considering the operator’s admission of guilt, noting their huge investment in the country, the large subscriber base it holds and Nigeria being its largest market, the decision to arrive at the reduction was not too difficult”, said the Director of Public Affairs for the NCC, Mr Tony Ojobo.

To avert a situation where such cancellation or reduction could be seen as being against the law, the relevant enactment should have a provision that gives the regulator discretionary power to reduce or cancel fines. This will allay the suspicion of arbitrariness on the part regulators and those in power.

 

 

 

ENFORCEMENT OF INTERNATIONAL ARBITRATION

 

International commercial arbitration as defined in chapter 1, Sections1 (3), 1(4)UNCITRAL Model Law as :

“(3) An arbitration is international if:

  • The parties to an arbitration agreement have, at the time of conclusion of

That agreement, their places of business in different states; or

  • One of the following places is situated outside the state in which the parties their places of business…
  • The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.

It could also arise from a legal relationship which must be considered commercial where either of the parties is a foreign national or resident or a foreign body corporate, company, association or body of individuals whose central management or control is in foreign hands. Thus, under the Nigerian law, arbitration with a seat in Nigeria but involving a foreign party will also be regarded as international commercial arbitration.

The willingness of Nigerian courts to enforce foreign arbitration awards and the ease or difficulty of doing so and the likely timescale of the process of enforcement are issues of immense concern to any foreign person wishing to enforce an arbitral award in Nigeria. This is the focus of this article.

Foreign arbitral awards can be enforced in Nigeria through five principal ways, namely:

(a) By an Action upon the award

In Toepher Inc. of New York v. Edokpolor (trading as John Edokpolor & Sons) [1965] All N.L.R. 307, the Nigerian Supreme Court held that a foreign arbitral award could be enforced in Nigeria by suing upon the award, even where there is no reciprocal treatment in the country where the award was obtained. To succeed in the action, the plaintiff must prove the existence of the arbitration agreement, the proper conduct of the arbitration in accordance with the agreement, and the validity of the award.

The defendant may, however, resist the enforcement of the award by challenging the award, the conduct of the arbitration or the jurisdiction of the arbitral tribunal. However, the defendant cannot rely on misconduct or impartiality on the part of the arbitral tribunal, for those points can only be taken on an application to set aside the award. In Nigeria, this procedure could take about a year or more to conclude.

(b) By registration under the Foreign Judgment (Reciprocal Enforcement) Act 1990
Under the Foreign Judgment (Reciprocal Enforcement) Act 1990, a judgment or award obtained in a foreign country may be enforced in Nigeria within six years of the judgment or award.

The judgment or award would have to be registered first in a Nigeria court with jurisdiction to hear the dispute. The judgment must be final and conclusive as between the parties and there must be payable sum of money, not being a sum payable in respect of a fine or other penalty. However, only countries, which accord reciprocal treatment to Nigeria, as designated by the Minister of Justice, would be recognized. Under Section 6 of the Act, the registered award or judgment may be set aside on the application of the defendant if the court is satisfied that:

• the Act has not been complied with, or
• the original court had no jurisdiction, or
• the judgment was obtained by fraud, or
• that the enforcement would be contrary to public policy, or
• on grounds of res judicata, or
• that the rights under the judgment are not vested in the person by whom the application for registration was made.

Ordinarily this is a fast process but of limited application due to the requirement that the award must be for the payment of a sum of money and the judgment must have become enforceable as judgment of a court according to the law of the place where it is made. If the registration is challenged, the process may become prolonged up to a year or more.

(c) Under Section 51 of the Arbitration & Conciliation Act, 1990

Section 51 of the Arbitration and
Conciliation Act, 1990 provides that:

“(1) An arbitral award shall, irrespective of the country in which it is made be recognized as binding and subject to this section and section 32 of this Act, shall, upon application in writing to the Court, be enforced by the Court.
(2) The party relying on an award or applying for its enforcement shall supply (a) the duly authenticated original award or a duly certified copy thereof; (b) the original arbitration agreement or a duly certified copy thereof (c) where the award or arbitration agreement is not made in the English language, a duly certified translation thereof into the English language.”

Section 52 provides a list of grounds for refusing recognition or enforcement which are similar to the ones mentioned in (b) above. These grounds could also be a hindrance to an otherwise very expeditious method of enforcement.

(d) Enforcement under the New York Convention 1958

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Award 1958 applies in Nigeria by virtue of section 54 of the Arbitration and Conciliation Act 1990. Nigeria has made reciprocity reservation and so only awards made in contracting states that undertake to recognize and enforce awards made in other contracting states, including Nigeria, will be recognized and enforced in Nigeria.

(e) Enforcement under the International Centre for Settlement of Investment Disputes (ICSID)

Nigeria ratified the ICSID Convention on 23 August 1965. In pursuance of its commitment to domesticate the ICSID Convention, the convention was re-enacted as a local legislation vide the International Centre for Settlement of Investment Dispute (Enforcement of Awards) Act, cap 19 Laws of the Federation of Nigeria 1990. The Act provides that an ICSID award shall be enforced in Nigeria as if it were an award contained in a final judgment of the Supreme Court if a copy of such an award, duly certified by the Secretary General of the Centre is filed in the Supreme Court by the party seeking its recognition and enforcement. This is perhaps the fastest procedure in Nigeria for enforcing an arbitral award as there is little or no room for objections to the enforcement of the award.

 

The Nigerian Gas Conundrum

Nigeria is a well-known leading oil producer and a key member of the Organisation of Oil Producing and Exporting Countries (OPEC). It is the highest oil producer in Africa and the sixth in OPEC. Nigeria currently produces about of 2.5 million barrels per day. While Nigeria is well known for its abundant oil resources, Nigeria is not as well known for its gas potential. Ironically, Nigeria appears to be more endowed in gas than oil. It is therefore not surprising that the gas sector has recently been receiving increased attention, especially with the dwindling fortunes of the oil business.

Nigeria’s gas reserve is put at around 180 trillion standard cubic feet (SCF). It in the top-10 bracket of the world in terms of its gas reserves and it is the leader in Africa. If its enormous gas potential is properly harnessed, Nigeria is capable of experiencing great developmental strides and growth that should naturally accrue to a country as blessed with so much abundant resources as Nigeria is. To achieve its potential, however, Nigeria has to overcome some critical challenges.

One of the ways of realizing income from gas sales is via Liquified Natural Gas (LNG). As stated in its website, “NNPC’s vision is to make Nigeria the leading Liquified & Natural Gas (LNG) producing nation in the world and to promote sufficiency in the domestic power supply.

“We intend to achieve this goal by monitoring the commercialization of Nigeria’s abundant natural gas reserves, reducing gas flaring, promoting viable LNG projects, power plants and associated gas projects”. This vision is far from being realized.

 

According to the website, The Federal Government has set the following objectives for NNPC as regards Gas production:

  • To monitor and expedite the commercialization and the development of Natural Gas for Domestic and Export markets
  • To protect the Federal Government interest in LNG & IPP ventures
  • To monitor and support all LNG and Independent Power Plants (IPP) ventures
  • To support NNPC Human Resource capacity building
  • To work towards achieving and sustaining “zero” flaring of Associated Gas
  • Promote the Nigerian Content.

Nigeria’s initial foray into the LNG market started with the establishment of the Nigeria Liquified Natural Gas (NLNG) plant. The facility is located in Bonny Island and  currently has six liquefaction trains with a seventh train planned to increase its capacity to more than 30 million tons per year (1,440 Bcf/y). It has enjoyed relative success, in terms of earning revenue for the nation and meeting the objectives of its establishment. However, other planned LNGs such as the Olokola LNG and the Brass LNG Limited are yet to take off and key members have divested, despite initial enthusiasm generated at conception..

Nigeria exports some of its natural gas via the West African Gas Pipeline (WAGP), which began commercial operations in 2011. The pipeline is operated by the West African Gas Pipeline Company Limited (WAPCo), which is owned by a consortium of Chevron, Shell and representatives of interests of Nigeria, Ghana, Benin and Togo. All has not been smooth in this axis too as gas off-takers, have not been meeting their payment obligations. Also, due to the need to satisfy the domestic market and disruption in operational areas in Nigeria, gas demand by the off-takers have sometimes not been met.

In 2009, NNPC signed a memorandum of understanding (MoU) with Sonatrach, the Algerian national oil company, to proceed with plans to develop a 2,500-mile pipeline – the Trans-Saharan Gas Pipeline (TSGP) which would carry natural gas from oil fields in Nigeria’s Delta region to Algeria’s Beni Saf export terminal on the Mediterranean Sea and is designed to supply gas to Europe. Due to various factors, including lack of political will, security concerns along the pipeline route, increasing costs, and ongoing regulatory and political uncertainty, this project is yet to take off.

The development of the Nigerian natural gas sector has been hampered by lack of infrastructure to monetize natural gas. Some associated gas (gas that are produced with oil) is currently flared. The inability of the Nigerian government (represented by NNPC) to meet its cash call obligations to its Joint Venture partners has contributed in large measure to this. Several flare-out targets have been set by the industry, but these have never been met due to non-availability of fund to develop the much-needed gas processing plants and gas pipelines.

The militancy in the Niger Delta area, where Nigeria’s oil and natural gas are produced from has also affected adversely the growth of the gas sector. Constant conflicts between local groups and attack on oil companies by locals seeking a share of the national wealth often lead to field shut-down and declaration of force majure in existing contracts and projects. This has made Nigeria a non-attractive sector for potential investors. Cost of operation due to insecurity has skyrocketed and making investment unattractive.

Uncertainty around legal and regulatory framework has also been the bane of development of the gas sector. In 2008, the government of Nigeria initiated The Petroleum Industry Bill (PIB), to re-organise the oil and gas industry, re-structure the Nigeria National Petroleum Corporation (NNPC) and codify new fiscal terms governing the oil and natural gas industry. Up to this moment, the Bill is yet to be passed into law due to various objections to its provisions by various interest groups. The IOCs are concerned that proposed changes to fiscal terms may make some projects commercially unviable, particularly deep-water projects that involve greater capital spending. The uncertainty created by the non-passing of the Bill into law has dampened enthusiasm and interest in investment in the gas sector.

In the last few years, because of the need to increase its power supply capability, the Nigerian government began to pay attention to the supply of gas for domestic use, especially to power generating plants operating within the country. This has led to imposition of what is termed “domestic gas supply obligation” on gas producers, as part of the new National Gas Master Plan (NGMP). By this, the gas producers are required to reserve certain proportion of their gas produce, for the domestic market. However, due to the very unattractive tariff structure for domestic gas (when compared with international gas prices), producers are very reluctant, to supply gas for domestic needs. Government has seen need to address this disparity between domestic and international gas prices and have started gradual increases of domestic gas prices with the ultimate objective of bringing it at par with the international ones.

With a new government in place, it is hoped that proper focus would be placed on re-positioning of the gas sector as a lever for development of the Nigerian economy. Natural gas and its by-products have the capability of aiding the growth of the other sectors of the economy particularly the power, manufacturing and the agricultural sectors. The new government should re-position the gas sector by tackling the challenges discussed above, as the sector has tremendous potential of facilitating rapid growth of the Nigerian economy.