INTRODUCTION
Parties to commercial arbitration, particularly in investment disputes, often have foreign origins. They may prefer counsel or arbitrators from their jurisdictions. While it is settled that there are ordinarily no mandatory qualifications for the appointment of arbitrators in Nigeria, the same cannot be said for legal practitioners representing parties in arbitration proceedings in Nigeria. In Shell Nigeria Exploration and Production Company and Three Others v Federal Inland Revenue Service and Nigerian National Petroleum Corporation (Shell v FIRS),Footnote 1 Nigeria's Court of Appeal pronounced that it is a requirement under Nigerian law that legal practitioners who sign processes for parties before arbitral tribunals in Nigeria be enrolled to practise law in Nigeria, satisfying the requirements of the Nigerian Legal Practitioners Act (LPA).Footnote 2
The qualification question for party representatives has long been an unsettled point and, even before the issue arose in court, has merited scholarly scrutiny.Footnote 3 Upon reflection, it would appear that the Shell v FIRS decision has broader implications, not just for parties’ representatives, but also in certain instances in respect of arbitrator appointments, as examined in this note. The court ruled that only Nigerian qualified legal practitioners are qualified to sign processes filed on behalf of parties before arbitral tribunals. Of course, the court acknowledged that the parties themselves are not prevented from signing the processes. Foreign qualified legal practitioners (FQLP) are however excluded from signing the processes, as a direct consequence of the right to sign arbitral processes being restricted to Nigerian enrolled legal practitioners. This raises questions as to whether FQLP are also precluded from conducting the parties’ cases before arbitral tribunals in Nigeria. Analysing the decision and applicable legal principles, it is argued that there is a need to amend article 4 of Nigeria's Arbitration RulesFootnote 4 to align it to the International Bar Association Guidelines on Party Representation in International Arbitration 2013 (IBA Guidelines)Footnote 5 and article 5 of the UN Commission on International Trade Law (UNCITRAL) Arbitration Rules 2010. This would clearly allow parties to be represented or assisted by “person(s) of their choice”, who could be technically or commercially skilled persons, not just legal practitioners, thus restoring the flexibility and autonomy for which parties prefer arbitration. This would remove arbitration from the purview of the LPA and restore international confidence in Nigerian arbitration.
SHELL V FIRS: RELEVANT FACTS
The appellants were international petroleum companies (Nigerian registered entities) and had entered into a production sharing contract (PSC) with the federal government of Nigeria, represented by the Nigerian National Petroleum Company (NNPC). The appellants’ complaint was that the NNPC had lifted more crude than the amount to which the government was entitled under the PSC. Consequently, the appellants commenced arbitration proceedings. The Federal Inland Revenue Service (FIRS), which was party to neither the PSC nor the arbitration, then instituted an action at Nigeria's Federal High Court seeking an antiarbitration injunction to quash the arbitral proceedings, on the basis that the dispute was a tax dispute and was not therefore arbitrable. This argument was upheld by the High Court, thus nullifying the arbitral proceedings.Footnote 6 Peeved, the appellants appealed to the Nigerian Court of Appeal. Both FIRS and the NNPC then filed a respondents’ notice urging the Court of Appeal to affirm the High Court's decision upon determining the issue of: “[w]hether the Notice of Arbitration and Statement of Claim by which the appellants as claimants commenced the arbitration exercise are competent having been prepared by law firms not recognised or licensed to practice law or sign legal processes as legal practitioners in the Federal Republic of Nigeria”.Footnote 7
An international law firm, Clifford Chance LLP, and the Nigerian law firm AELEX had indeed signed the notice of arbitration and statement of claim. The Court of Appeal discounted the appellants’ argument that arbitral proceedings are different from judicial proceedings such that the requirements for signing judicial processes cannot be made requirements for arbitral processesFootnote 8 and that, as the Arbitration and Conciliation Act (ACA) set out all the requirements of a valid notice of arbitration without making signing a requirement, signing the notice of arbitration is not mandatory.Footnote 9 The Court of Appeal rather held, per Yahaya JCA, that:
“It is correct, that article 3(3) of the 1st Schedule to the Arbitration Act lists what the Notice of Arbitration shall contain. Article 4 of the 1st Schedule thereto, gives the parties the right to be represented or assisted by legal practitioners of their choice and the names and addresses of such legal practitioners must be communicated to the other party. By the provisions of sections 2(1) and 24 of the Legal Practitioner's Act 2004, a legal practitioner is that person entitled to practice as a barrister or as a barrister and solicitor as his name is on the Roll of such practitioners in Nigeria. The appellants decided to be represented by legal practitioners at the Tribunal. It behoves them, not only to communicate the names and addresses of the legal practitioners, but to have them sign the processes, as their representatives since they did not sign same themselves. So, for the Notice of Arbitration and consequently the Claim to be competent, recourse must be made to the Legal Practitioner's Act 2004. Are Clifford Chance LLP and AELEX legal practitioners? The only way to show they are, is by stating or showing they are persons who have been enrolled. That has not been shown. They are therefore not competent to sign the initiating processes before the Tribunal, which no doubt is a legal proceeding.Footnote 10 Once the initiating process was invalid, null and void, the Tribunal had no jurisdiction to act on it. All the proceedings before it are a nullity and are hereby struck out.”Footnote 11
SCOPE OF “LEGAL REPRESENTATION” OR “REPRESENTATION”
Article 4 of the Arbitration Rules upon which the Shell v FIRS decision turned provides for the representation of the parties in arbitration. The meaning of “represent” or “representation” as related to “legal practitioner” is therefore key to determining the basis of the Court of Appeal's decision. In Fawehinmi v Nigerian Bar Association (No 1),Footnote 12 Obaseki JSC noted that “[t]he word ‘represent’ in the context of legal representation means to act or stand for or be an agent for another”.Footnote 13 In this context, representation of the parties in arbitration necessarily relates to “acting”, “standing for” or being an “agent” for a party to the arbitration, all of which, the author contends, amounts to conducting the parties’ case before the arbitral tribunal on behalf of the parties or indeed in place of the parties.
LEGAL PRACTITIONERS OF PARTIES’ CHOICE
Article 4 of the Arbitration Rules allows parties to arbitration to be represented by legal practitioners of their choice. There is some similarity here to section 36(6)(c) of the Nigerian Constitution,Footnote 14 which guarantees the right to legal practitioners of one's choice.Footnote 15 This guarantee is however only applicable to the defence in criminal cases.Footnote 16 It is inapplicable to civil cases, which are usually the subject of arbitration, and has been interpreted to be subject to the counsel of choice not just being qualified to practise in Nigeria but entitled to entry onto the Supreme Court Roll of Legal Practitioners in Nigeria (the Roll).Footnote 17
The perspective of the Legal Practitioners Act
Under section 24 of the LPA, only persons whose names are on the Roll or have received a warrant from Nigeria's chief justice for the purpose of particular proceedings are entitled to practise as a barrister and solicitor in Nigeria.Footnote 18 Any person whose name is not on the Roll is not allowed to “engage in any form of legal practice in Nigeria”.Footnote 19
Section 15 of the ACA requires that arbitration proceedings be conducted in accordance with the Arbitration Rules, which in turn prescribe that “parties may be represented or assisted by legal practitioners of their choice”.Footnote 20 It is therefore quite clear that “legal practitioner” as used in the Arbitration Rules has its reference point in “legal practitioner” as used in the LPA, that is, one whose name is on the Roll. This is because, as the ACA and Arbitration Rules failed to define “legal practitioner”, the only acceptable definition is that in the LPA, which regulates legal practitioners in Nigeria. This view is further fortified by section 8(5) of the LPA that specifies the manner in which lawyers have a right of audience and take precedence in arbitral tribunals.Footnote 21
The Court of Appeal weighed in on the issue in Shell v FIRS, where the notice of arbitration signed by an international law firm, Clifford Chance LLP, and the Nigerian law firm AELEX was held incompetent for having not been signed by a legal practitioner in accordance with sections 2(1) and 24 of the LPA. Consequently, the entire proceedings before the arbitral tribunal were nullified. The Court of Appeal held that, as the parties had chosen to be represented by legal practitioners in Nigeria, they were obligated “not only to communicate the names and addresses of their legal practitioners, but to have them sign the processes, as their representatives”.Footnote 22
The ratio of the Court of Appeal is clearly limited to signing arbitration processes.Footnote 23 However, the decision raises questions about the competence of FQLPs to conduct cases before arbitral tribunals in Nigeria. Logically, the same consequence should follow, as the analysis above of “represent” and “legal practitioner” as used in article 4 of the Arbitration Rules and sections 2 and 24 of the LPA demonstrates. If FQLP are prevented from signing arbitration processes at pain of nullifying the entire arbitral process, FQLP will also therefore be precluded from conducting parties’ cases.
AsouzuFootnote 24 and SashoreFootnote 25 express legitimate fears that restricting legal representation before arbitral tribunals to lawyers enrolled to practise in Nigeria will hamper Nigeria's development as an arbitration destination; nevertheless, the Court of Appeal's decision is unassailable and representative of the law. Briefly, the parties required or hired legal practitioners to represent them in arbitral proceedings. The question then becomes, which persons are entitled to practise as legal practitioners in Nigeria? The answer can only be found in sections 2(1) and 24 of the LPA, to the effect that only lawyers whose names are entered on the Roll are entitled to act or represent clients as legal practitioners in Nigeria. The overarching argument will always be the protectionist regime of sections 2(1) and 24 of the LPA, interpreted in Okafor v Nweke as preventing those whose names are not on the Roll from engaging “in any form of legal practice in Nigeria”.Footnote 26 Thus, aside from the restriction of representation to legal practitioners under article 4 of the Arbitration Rules, sections 2(1) and 24 of the LPA will always raise the question of whether FQLP assisting or representing parties before arbitral tribunals in Nigeria are engaged “in any form of legal practice in Nigeria”.
That said however, commercial arbitration in Nigeria often involves parties from diverse nationalities and jurisdictions. It is only fair that those parties would want to be represented by legal practitioners with whom they are familiar. Nigeria would otherwise become unpopular as an arbitration jurisdiction, meaning that parties would take their disputes elsewhere for settlement. Against this background, there is a need to amend the ACA to align with similar provisions in established and emerging arbitration jurisdictions such as Singapore,Footnote 27 MalaysiaFootnote 28 and Germany,Footnote 29 which have amended their laws to allow FQLP to represent parties to arbitration in their jurisdictions.
ARBITRATION IS OPEN TO BOTH LAWYERS AND NON-LAWYERS
In Stabilini Visinoni Limited v Mallinson and Partners Limited,Footnote 30 the Court of Appeal had earlier opined that, given that arbitration practice is not limited to the legal community, it is not mandatory that the notice of arbitration be signed by a legal practitioner, because arbitration is open to both lawyers and non-lawyers. This implied that the parties to arbitration may be represented by any person of their choice, whether a lawyer or non-lawyer or even FQLP. It is important however to situate Stabilini Visinoni v Mallinson within its proper context. First, article 4 of the Arbitration Rules specifying that parties may be represented or assisted by legal practitioners had not been considered in that case; in contrast, the court in Shell v FIRS considered article 4 of the Arbitration Rules and rightly came to the conclusion that its effect is to restrict the right to provide representation and assistance to parties to legal practitioners. Secondly, it was clear in Stabilini Visinoni v Mallinson that the notice of arbitration had been signed for and under the authority of Emeka Ngige SAN, a Nigerian Supreme Court enrolled legal practitioner. Thus, the issue was simply whether the junior counsel who had signed the notice of arbitration for Emeka Ngige SAN should have also indicated his (junior counsel's) name. The Court of Appeal thought that this was a mere technicality associated with litigation and held that such technicalities had no place in less formal arbitral procedures.Footnote 31 It is true that Augie JCA had stated “that arbitration is not limited to the legal community; it is open to lawyers and non-lawyers, and it cannot be a requirement that the notice of arbitration initiating same must be signed by a legal practitioner”.Footnote 32 This statement, however, must be taken within the context examined above and especially in view of the clear interpretation of the Court of Appeal in Shell v FIRS.Footnote 33
In addition, it should be pointed out that, had the Arbitration Rules intended that non-legal practitioners or even FQLP be able to represent parties to arbitration, the rules would have expressly stated so. Indeed, despite adapting the Arbitration Rules from the UNCITRAL Arbitration Rules 1976,Footnote 34 the drafter replaced “persons of their choice”Footnote 35 with “legal practitioners of their choice”.Footnote 36 When article 4 of the Arbitration Rules (which allows parties “representation” by “legal practitioners of their choice”) is contrasted with the IBA Guidelines (which clearly exclude the requirement that party representatives be legal practitioners),Footnote 37 the nexus between article 4 of the Arbitration Rules and sections 2 and 24 of the LPA becomes clearer. The inevitable conclusion is that reference to “legal practitioner” in the Arbitration Rules refers to “legal practitioner” in the LPA.
ARE PARTIES RESTRICTED IN THEIR CHOICE OF LEGAL PRACTITIONERS IN INTERNATIONAL ARBITRATION?
Some commentators believe that restricting FQLP from providing representation or assistance to parties in arbitration proceedings in Nigeria will not apply to international arbitration.Footnote 38 This argument is based on article 4 of the Arbitration Rules, construed by the Court of Appeal in Shell v FIRS as only applying to domestic arbitration.Footnote 39 It is important to note, however, that the scope of arbitration proceedings described as “international” by section 57(2)(a)–(d) of the ACA is very wide, including the parties’ prerogative to designate their arbitration as international if they so desire.
Article 4 of the Arbitration Rules is only one side of the coin. Whether Nigerian parties to arbitration where the dispute is clearly related to Nigeria can be represented or assisted by FQLP simply because they have designated their arbitration to be international, or the arbitration itself qualifies as international under the wide scope of section 57(2)(a)–(d) of the ACA, will depend on how the courts interpret sections 2 and 24 of the LPA. In assessing whether the courts will determine that there has been a breach of sections 2 and 24 of the LPA, it will surely be relevant whether Nigerian law is the governing law of the contract or whether Nigeria is the designated seat of the arbitration, for example. Sections 2 and 24 of the LPA are protectionist and restrict FQLP from being engaged “in any form of legal practice in Nigeria”.Footnote 40
As the law currently stands, the courts will have to decide whether the representation or assistance FQLPs offer to parties to arbitration in Nigeria amounts to “legal practice in Nigeria”. The major challenge to liberalizing party representation in Nigerian arbitration thus depends on interpreting sections 2 and 24 of the LPA amid uncertainties as to whether FQLP providing representation or assistance in arbitration proceedings in Nigeria could be considered to be practising law or otherwise. This uncertainty will continue, in the absence of a direct provision in the ACA allowing FQLP to provide representation or assistance to parties to arbitration in view of sections 2 and 24 of the LPA. Nonetheless, whenever Nigeria's appellate courts have the opportunity to reconsider the issue, the author hopes the courts will adopt the approach adopted by Augie JCA in Stabilini Visinoni v Mallinson,Footnote 41 recognizing that arbitration is not exclusive to lawyers, particularly specialized or international arbitration. Thus, if the parties can hire other professionals as arbitrators, such as architects or surveyors, why should they be prevented from hiring other professionals from representing them? Indeed, FQLP appearing before arbitral tribunalsFootnote 42 should simply be considered as professional arbitrators practising arbitration, not legal practitioners of any sort.
IMPLICATIONS FOR FOREIGN QUALIFIED LEGAL PRACTITIONER ARBITRATOR APPOINTMENTS
Notably, there is no requirement in Nigerian law that the arbitrator be a legal practitioner.Footnote 43 However, learned commentators opine that, where a sole arbitrator is to be appointed, that arbitrator should be a legal practitioner since the arbitrator is likely to deal with difficult problems of procedure and the substantive law of the dispute. Furthermore, a legal practitioner is better placed to understand these legal issues than a layman.Footnote 44 Where there is a three-man arbitral panel, recommended practice is that at least one member of the panel, preferably the presiding arbitrator, be a legal practitioner or have extensive training and / or experience in arbitration.Footnote 45 The other two arbitrators could then be persons technically or commercially sound in the area of the dispute.Footnote 46 Redfern and Hunter advise as a matter of strategy that a party to arbitration should be wary of appointing a lawyer as a party-appointed arbitrator when the presiding arbitrator is also a lawyer, leaving the other party's appointed arbitrator as the only person skilled in the technical or commercial area of the dispute.Footnote 47 This is sound tactical advice, although the requirements that arbitrators be impartial and neutral would seem to guard against the risk. In any case, a prudent option would be an agreement by the parties to appoint arbitrators who are commercially or technically sound in the area of dispute, who will then appoint a legal practitioner as the presiding arbitrator.
The application of the LPA's definition of legal practitioner to representation in arbitration also has implications for arbitrator appointments. For instance, where the arbitration agreement specifies specific qualifications for the arbitrators, the appointed arbitrators must have those qualifications, otherwise the arbitral tribunal's decision will be set aside on this fundamental ground.Footnote 48 It follows that, if the parties stated in their agreement that the arbitrator shall be a legal practitioner, applying the LPA definition of legal practitioner, only legal practitioners whose names are on the Roll would be entitled to be appointed as arbitrators. FQLP would not be entitled to be appointed as arbitrators in such instances as, by specifying “legal practitioner”, the parties would be deemed to have indicated a legal practitioner recognized by Nigerian law.
CONCLUSION
Arbitration is a commercial dispute resolution mechanism of choice for businesses, many of which are foreign investment related. In such cases, the foreign investor parties often opt for their home country legal practitioners,Footnote 49 with whom they are familiar, and it is only reasonable that they seek to have them represent them during arbitration proceedings. The LPA, arguably, does not however currently permit such representation. After all, legal proceedings were said in Ezenwa v Bestway Electronics Limited to include “all proceedings authorised or sanctioned by law and brought or instituted in a court or legal tribunal for the acquiring of a right or the enforcement of a remedy”.Footnote 50 This points to the inclusion of arbitration proceedings, which are themselves sanctioned by the ACA as legal proceedings.Footnote 51 It necessarily follows that only lawyers whose names are on the Roll are allowed by law to represent parties in these legal arbitration proceedings.
Extrapolating the logic of Shell v FIRS and applying the definition of legal practitioner to representation in arbitration proceedings, it would seem that: FQLP cannot conduct the parties’ cases in arbitration proceedings in Nigeria;Footnote 52 and where the parties have specified that the arbitrator should be a legal practitioner, only legal practitioners within the meaning of the LPA are envisaged, with the result that FQLP are also disqualified. This is not a desirable result as it detracts from the flexibility of process and procedure in arbitration lauded by the same Court of Appeal in Stabilini Visinoni v Mallinson.Footnote 53 It is hoped that, whenever the opportunity arises to amend the ACA, these restrictions will be removed by amending the ACA to align with the IBA Guidelines and article 5 of the UNCITRAL Arbitration Rules 2010. This would clearly allow parties to be represented by “person(s) of their choice”, not just legal practitioners, and restore the flexibility and autonomy attributes for which parties prefer arbitration. In this regard, FQLP would be treated not as legal practitioners but as persons of the parties’ choice to represent them in arbitration proceedings.
CONFLICTS OF INTEREST
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