‘Delay in court adjudication is a cardinal sin in commercial arbitrations’
Osaro Eghobamien (SAN) is one of the Founding Partners of Perchstone & Graeys. He is the Managing Partner of the firm and currently leads its Dispute Resolution and Banking & Finance Groups.
Osaro obtained his LLB from Queen Mary College, University of London and was admitted to practise in England and Wales in 1989. He subsequently returned and went to the Nigerian Law School for his BL and was subsequently admitted to practise in Nigeria in 1991.
He was conferred with the prestigious rank of Senior Advocate of Nigeria in 2008 in recognition of his diligence, passion and contribution to the legal profession.
Eghobamien takes every available opportunity to teach law and legal principles to young legal talent and is regularly at the Nigerian Law School, delivering lectures to the students.
The managing partner, Perchstone & Graeys, Mr. Osaro Eghobamien (SAN) in this interview with Assistant Editor, Law and Foreign Affairs, JOSEPH ONYEKWERE says the delay in justice delivery and the pervasive sense of insecurity stifle the bid to make Nigeria the hub of commercial arbitration in Africa.
What is your perspective about the argument that policies and regulations cannot substitute for law in the oil and gas sector?
We can’t use policy to change physical regime but policy can indicate where you are going and create some level of certainty. Ultimately, a law will have to be passed to reflect the policy. The only reason why policy is promoted and is being used, as a replica for a law is because of the challenges it takes to get any law through the National Assembly. Therefore in the absence of the law, there must be a framework to guide those who are in the sector because what we have is obsolete. Once a policy is introduced, a law would ultimately be passed to reflect the policy. Policy gives guidance to those who are operating within it in the absence of a regulation or a law dealing with that particular area and I think it is the best way to deal with an unusual problem.
There is this perspective that investors would not want to come in while there is no legal regime and also as a result of the existing policies that can change any time Undoubtedly, it would be better to have laws to state things in very clear terms so when there is a dispute, you know where rights and wrongs will fall, and even if we don’t have those investors coming in, what about the existing investors? I suspect that the fiscal regime will be guided more by policies that will be acceptable to both parties than a law that is obsolete. There are benefits in having polices in the absence of appropriate laws. The best to start with is the law but we don’t know when the National Assembly will pass the laws.
There is a view that the Petroleum Industry Bill (PIB) cannot even be passed into law the way it is and that the National Assembly shouldn’t be blamed for all the delays?
That is as a result of what PIB was, but currently, it is being broken into smaller bits. That is why we have the Petroleum Industry Governance Bill (PIGB) and other subsidiaries or broken down legislatures. I think the view was right but now we have gone pass that.
What are your thoughts about the anti-corruption and money laundering risks with regional enforcement updates for India-focused businesses?
This question must have been derived from a panel on which I sat in Mumbai, India. The theme of that inquiry was how Indian businesses could operate in any part of the world including Africa, without exposing themselves to the risk of corruption and money laundering. The other part is the methodology to recover assets that have been wrongly obtained from one jurisdiction and invested in another jurisdiction, for example; the Abacha loot. As far as Indian institutions or businesses were concerned, the point being made, was that international companies that had a strong footing in India needed to be aware, not just of regional risk, but peculiar risk in jurisdictions where they operate as well as risk presented by counter-part business partners. Ironically, even risk presented by regulators became a subject of discussion. I discussed the objectives of the Convention of Business Integrity (CBI). The CBI is an African initiative (originated from Nigeria by Soji Apampa & Prof. Yemi Osinbajo, Vice President of the Federal Republic of Nigeria). The focus of anti-corruption can easily be over-concentrated on punishment. We tend to ignore those who are striving in a difficult environment where corruption is perceived as a rare commodity. Consequently, the convention on Business integrity seeks to reward businesses that conduct their affairs with a degree of probity. The object of the CBI is to essentially reward and connect companies that have as their ethos, integrity. This can simply be by connectivity. International companies are insisting that they will only conduct business with certain types of local companies. CBI assists to create a web of such companies and certify companies that pass the benchmark. Once the stamp of approval is given, it effectively means you are open for business to those other companies that will only do business in a particular way; in effect it becomes rewarding to act with integrity. The Corporate Governance Rating System (CGRS) is pc on the Premier Board. This effectively means that such companies practising with integrity can assess credit at a cheaper rate. The intention is to extend CBI world-wide.
In your view, do you think that Nigeria is arbitration-friendly and what are your reasons?
In answering this question, there is a need to make a distinction between arbitrable and non-arbitrable matters. For non-arbitrable matters, the court will naturally not be friendly because parties appear to agree to wrestle jurisdiction from the normal courts and wrongly assume jurisdiction. This will include matters relating to tax, divorce and crime. These sorts of matters must be distinguished from arbitrable matters. Ordinarily, the courts should not intervene in matters that are arbitrable. So, where an award has been delivered and a party applies to set aside the award, such application should be dismissed speedily and summarily. The complication however arises from the fact that it takes too long for the courts to reach a finality on matters brought before them and then the party has a further right of appeal to court of appeal, then the Supreme Court. This delay is a cardinal sin in commercial arbitrations because the whole purpose of the preference for arbitration is the speedy resolution of disputes. It is important to also point out that this delay is not peculiar to arbitration but rather it is the result of a systemic failure. You can imagine that presently, as election petitions are ongoing, many of the commercial courts have suspended sitting. This is because the judge(s) occupying the court is said to be on a national assignment, which will almost certainly continue for the next one to two years. Ironically, this happens every time we have elections, so one wonders why this has not been resolved. It is extremely frustrating. That said, arbitration in recent time has begun to grow in popularity among lawyers, judges and the business community in Nigeria. The courts are also getting more receptive to alternative dispute resolution as an effective mode of resolving disputes, to which they show their support by being readily available to enforce not just arbitral awards, but also arbitration agreements. Many of what I will call erroneous decisions are a result of a lack of depth and capacity which is a wide-spread issue and not peculiar to arbitration
What do you think Nigeria can do to make the country a regional arbitration hub?
There is an architecture that is necessary to attract disputants to choose a particular region as its preferable venue for settling dispute. An identical question from a different perspective is: “why would people decide to domicile their arbitration in London, Singapore or any of the European countries?” First, parties must have confidence in the capacity and competence of those saddled with the responsibility of justice delivery within that jurisdiction. This is because invariably (though not exclusively), arbitrators are usually selected from a pool of people who practise within that legal system. Put differently, we need to be particular about the quality of persons appointed as arbitrators. They must exhibit a certain level of expertise, capacity, integrity and confidence. In terms of physical infrastructure, you must have good and effective technology. The venue of arbitration should be appealing and carry the aura expected of an ideal place for settling disputes. On a more general level, a region must be seen and perceived as safe. I have been involved in arbitration proceedings where the arbitrators have been advised by their embassies that the venue of the arbitration is unsafe. You can only imagine the impact that the recent advisory from the British Government will have on numerous arbitrations that ought to have been resolved here in Nigeria. The British High Commission recently released a statement declaring 21 States in Nigeria as unsafe, due to insecurity concerns. The government needs to urgently tackle the issue of insecurity. The perception of insecurity is even more damaging to Nigeria as a hub for arbitration than the insecurity itself.
What is your role as vice chairman of the convention of business integrity?
I alluded to some of the objectives of CBI earlier. My role, I would imagine, is to first and foremost promote exemplary conduct within the legal profession, my immediate constituency. There is a need to demonstrate to my younger colleagues that it is indeed possible to make a decent living from legal practice without compromising on issues of integrity. For instance, we have a strong policy in my office; no kickbacks. It has not been easy, but despite the hurdles, we are able to attract quality work. We are getting to a very interesting position, where integrity itself is a commodity that is priceless. On a broader level, the CBI is working to encourage and incentivise those who have decided to conduct their business with a certain level of integrity. We must be able to reward those who stand out and are determined in the face of monumental challenges. A typical example is the Corporate Governance Reward System, whereby the CBI has partnered with the Stock Exchange to rate companies that are deemed to have attained a certain benchmark in corporate governance. That rating is beneficial and will come in handy to deserving companies meeting the criteria. These deserving companies may be able to access credit at a cheaper rate. The Convention on Business Integrity intends to extend this approach to other professions including legal practitioners and ultimately create a web whereby companies that are rated would only employ service providers who are equally rated and are on the same principles.
How has Nigeria currently faired in the World Bank’s comparative analysis of the ease of doing business, especially with the intervention of the Presidential Enabling Business Environment Council (PEBEC)?
Having been elevated by 24 points in the World Bank Ease of Doing Business ranking of 2017, I would say that we are getting a few things right. As you however know, we did not do very well last year (2018) in terms of rating. Nigeria deteriorated to 146th position in 2018 from 145th position in 2017. This is because there is obviously a lot to accomplish. It will surprise you to know that the architecture necessary for resolving commercial dispute continues to present challenges. Should we get that right it will go a long way in encouraging foreign business activities in Nigeria.
So, the general perception that the police and the judiciary are corrupt is not good for our rating. Other issues like congestion at the ports still and illegal tolls on the highway will continue to stifle business operations in Nigeria. With regard to legislation, I happened to be directly involved in one of the major offshoots of the Ease of Doing Business mandate, that is Secured Transactions in Moveable Assets (STIMA) Act which established a collateral registry, the first of its kind in the country. With this Act, SME’s can use moveable assets such as vehicles, machinery, account receivables and others as collateral for obtaining loans, thereby making it easier for business to secure credit, and at low interest rates. Its full impact is yet to be felt however, partly because of certain bureaucratic inhibitions. For example, a platform to auction moveable assets in the event of a default, should interface with the current website platform of the collateral registry, to fully maximise the intent of the registry. In terms of agriculture, warehouse receipts representing commodities should be easily assignable and tradable on the commodities exchange. The underlining commodities can then be taken as collateral and registerable at the collateral registry. This in turn, will give confidence to the banks, creditors and investors in the value chain. Quite honestly, we just need an engineering of sorts and Nigeria will be ready to maximise the benefit of some of the steps, which have already kick-started.
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