Invoke arbitration clause to curb endless litigations, CJN tells heads of Courts

… As Osinbajo seeks speedy dispensation of justice

The Chief Justice of Nigeria (CJN), Justice Walter Onnoghen, on Monday, urged heads of courts to empower judges in their respective rules of court to invoke practice directions on arbitration clause for speedy trial of cases relating to foreign investment.

Onneghen gave the directive at the third annual Judges conference in Abuja organised by International Institute for Petroleum, Energy Law and Policy (IIPELP) in collaboration with National Judicial Institute (NJI).

He said that the endless litigation in the country has grossly affected foreign investment.

According to him, no investor, whether domestic or international would want his investment tied down in seeming endless litigation, especially where there is an arbitration clause in the contract.”)

“May I draw the attention of heads of courts that the time saving nature of an arbitration proceeding encourages heightened commercial and economic activities as well as foreign investment.”

The CJN consequently requested that no court should entertain an action instituted to enforce a contract, or claim damages arising from a breach thereof, in which the parties have, by consent, included an arbitration clause and without first ensuring that the clause is invoked and enforced.

He further urged the court to insist on enforcement of the arbitration clause by declining jurisdiction and award substantial costs against parties engaged in the practice.

The CJN warned that a party “who institutes an action in court to enforce breach of contract containing an arbitration clause without first invoking the clause is himself, in breach of the said contract and ought not to be encouraged by the courts.

Speaking at the event, the Acting President, Yemi Osinbajo (SAN) called for measures that would help in speeding up the “crawling” judicial processes in the country.

Osinbajo described the present slow judicial process in the country as a nightmare for investors.

“We need to evolve measures that will speed up the judicial decisions. We also need these decisions not to be too complicated for investors to easily understand”, he stated.

Represented by the Minister of Petroleum Resources, Ibe Kachikwu, the Acting President further expressed the need to align decisions of various courts with some level of credibility so as to avoid complicated decisions from unnecessary forum shopping

“We need to ensure sanctity of international arbitration. Also, judges should be trained in petroleum and energy sector so that they would be fully equipped to handle the emerging trends in the sector.”

Noting that both petroleum and the power sectors provide 80 per cent of Nigeria’s revenue and over 80 percent of foreign direct investment, Osinbajo expressed worries that as critical as the sectors are, if the country is not positioned to supply the necessary power supply essential for driving the economy, the country will not make much progress.

Declaring the workshop open, the Chief Justice of Nigeria (CJN), Justice Onnoghen, stated that judges must not allow technicalities to stand in the way of justice in order to sustain public confidence in the judiciary. He added that the workshop was to enlighten judges on global best practices in confronting challenges that may arise in the power and petroleum sectors.

He said: “Some of the notable challenges faced are in the areas of taxes, rebates, royalties, demand for corporate social responsibility and environmental disputes, which require the court’s to adjudicate.”

The CJN however noted that conflicting judgements were a necessary part of the judiciary as they helped to strengthen the system.

“Conflicting decisions unfortunately, are necessary because when you approach a court in Lagos, your facts are stated and the facts of that case are also different in a court in Port Harcourt. “So, the judge takes a decision based on the facts before him and the law, and that is why we have the Court of Appeal who will look at the law and decide.”

He also expressed confidence that the workshop would aid the justices and judges in the adjudication and resolution of lingering disputes bedeviling the sector.

Executive director IIPELP and Visiting Professor of Energy Law, Niyi Ayoola-Daniels, stated that the workshop with the theme, Law and the Changing Face of Petroleum, Gas and Power Sectors in Nigeria, was to intimate judicial officers and judges on the appropriate legal, fiscal and regulatory issues in recent policy decision by the oil and energy stakeholders.

He added that a lot of reforms are currently ongoing in the Petroleum, Gas and Power sectors, including the recently passed Petroleum Industry Governance Bill (PIGB) as well as the lingering Gencos payment issue.

“The power sector is going through a lot. The electricity generating companies (Gencos) are threatening to shut down electricity supply if government does not guarantee their payment scheme.

“The essence of training judges on these issues therefore is to get the judiciary understand the dynamics of the Petroleum, Gas and Power value chain in preparedness for adjudicating on legal issues that may require judicial interpretation in these sector”, he stated.