CJN asks judges to invoke arbitration clause to attract foreign investment

The Chief Justice of Nigeria (CJN), Justice Walter Onnoghen, has urged judges across the federation, to invoke their powers under respective rules of courts to issue practice directions on arbitration clause.

The CJN gave the order last week at the third annual Judges’ workshop on petroleum, gas and power sectors, organized by the International Institute for Petroleum, Energy Law and Policy (IIPELP), in collaboration with National Judicial Institute (NJI).

Justice Onnoghen stated that 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.
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“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,” he said.

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 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.”