ENFORCEMENT OF VAGUE ARBITRATION AGREEMENT UNDER THE NIGERIAN LAW: LEARNING FROM THE UNITED STATES AND ENGLAND

Abstract

This paper discusses the jurisdiction of the Nigerian courts in the enforcement of vague arbitration agreements. It identifies two broad categories of vague arbitration agreements. First, vague arbitration agreements that express the intention of the parties to arbitrate the dispute in a permissive language, such as “may” instead of “shall”, which denotes an obligation. Second, vague arbitration agreements that provide for an arbitration institution or the applicable rules that no longer exist. On the one hand, the article argues that vague arbitration agreements in the former category impose an obligation on the parties and should therefore be enforceable by summary judgment procedure or even be dismissed as frivolous and an abuse of the court's process. On the other hand, the article maintains the position that vague arbitration agreements in the latter category are structurally defective, thus requiring the courts to fill in the gap by activating the default mechanism rule for the appointment of arbitrators. This is where the “rubber meets the road” in determining whether the court action is unwarranted or necessary. Despite the enforcement of vague arbitration agreements by Nigerian courts, entertaining a lawsuit in light of the first category of vague arbitration agreements can hamper efficiency in arbitration and defeat the purpose arbitration provisions in a contract. The American and the English experience in light of the second category of vague arbitration agreement demonstrate an approach to melding the relevant provisions of the law of arbitration to pragmatic litigation that promotes the principles and practice of arbitration. This is an approach that the Nigerian courts should follow.