INTERNATIONAL COMMERCIAL ARBITRATION: CHOICE OF LAW/VENUE –ISSUES TO CONSIDER1

BY

JOSEPH NNABUEZEH MBADUGHA LL. B, LL.M (WALES), B.L., MCI Arb2.

INTRODUCTION

The internationalisation of the world through various International Conventions and Treaties that several nations are signatories to and have subsequently incorporated into their national laws has reduced the world to a globe, resulting in commerce among nations. Further, no nation is an island. This, leads to nations depending on each other for certain goods and services with the resultant international commerce. International commerce, which may be, simply defined as a commercial relationship amongst different nations, companies or citizens of different nations carries its consequent legal risks that require resolution.

Parties in international transactions often desire fast resolution of their disputes but are not willing to submit to their opponents’ national courts, hence international commercial arbitration, which is perceived as a quicker means of dispute resolution. Also, parties in international transactions may not feel comfortable having their disputes resolved in their opponents’ domestic jurisdiction and/or making their disputes subject to the national laws of their opponents, thus the choice of neutral venues and laws.

This paper focuses on parties who knew as at the time of an arbitration agreement or before referring a dispute therein to an arbitral tribunal that they should choose the procedural law, the venue of the arbitration and the substantive law of the dispute. The factors to be considered in choosing these are discussed below:

1. Procedural law/venue The following factors if taken into consideration would ensure that the parties realise their desires:
(a) Equal Access to justice Access to justice may be defined as the right to bring ones dispute before a tribunal or a court, and the right to enter and participate in the judicial process of adjudication of ones dispute by either a court or a tribunal. It is also the right to have questions bordering on ones civil right and obligation determined judicially3 by either courts or tribunals. Thus, in the Nigerian case of Nnadi v Okoro4, the Court of Appeal said that there is no question more fundamental in the whole process of adjudication than that of access to justice, that is to say access to courts or tribunals (emphasis added)

One major importance of access to justice is that commercial men, being aware of their unhindered right or freedom to submit their disputes to a neutral body for settlement, would naturally and freely engage in their activities, knowing that any dispute that arises would be so resolved. It becomes important therefore, in choosing the substantive law and venue of arbitration, that parties consider the issue of accessibility of justice. This will involve looking at the law and rules of arbitration of the particular jurisdiction they intend to choose. This is imperative because procedural and substantive laws of some countries may contain provisions that may directly or indirectly prevent the disadvantaged from accessing arbitration and thereby constitute a bar to

FOR A FULL TEXT, SEE THE ARBITRATOR (NIGERIAN BRANCH) VOL. 3 NO. 1 JANUARY – MARCH, 2006

  1. This paper was submitted for presentation at Vancouver, Canada by the author under the aegis of the Centre for International Legal Studies in a Conference on Lawyering in International Market held on 10th – 16th April 2005.
  2. ¨The author is the Principal Partner of McCarthy Mbadugha & Co. and heads the Admiralty & Cross – Border Practice Group of the Firm.
  3. S. 6 (6) (b) Constitution of the Federal Republic of Nigeria, CP. C23 Laws of the Federal Republic of Nigeria 2004.
  4. [1998] 1 NWLR (Pt. 535) 573 C. A.
site design by veidetheory