Legal Framework for International Investment Arbitration in Nigeria - A Critique
40 Pages Posted: 23 Aug 2019
Date Written: August 21, 2019
Why is the state of investment climate in Nigeria a serious concern for the world? The answer seems readily available. Nigeria is the largest trading partner in sub-Saharan Africa, mainly due to the high level of petroleum exports from Nigeria. Secondly, investors from all over the world also see Nigeria as a potential investment breeding economy. The reasons are not far-fetched – Nigeria is Africa’s most populous country; the continent’s second largest oil reserves; potential largest economy in Africa; and the recipient of major share of foreign capital in Africa. For Nigeria, the concern raised above are fundamentally important and demands attention. The reason is very clear. Meaningful and long-lasting economic growth and development in Nigeria is contingent upon securing substantial amounts of foreign investments. Foreign investments permit the transfer of technology; facilitates improvements in productivity and access to world market; contributes to improvement of infrastructures; and helps to develop indigenous industries. Foreign investments survive and thrive where reliable dispute resolution mechanism is an integral part of the entire investment climate; to balance the tension between the varying degrees of interests that exist between the host states and the foreign investors. interest in this research is stimulated by the curiosity to examine the mechanisms for resolving the conflicting and competing interests of the host state and foreign investors. The objective of the study is to suggest ways to improve the legal frameworks for resolution of investor-state dispute in order to attract more foreign investments to Nigeria. The focus of this paper is to analyse international investment arbitration as a mechanism for settlement of investment disputes within the context of Nigerian Law. The fact that the efficacy and primacy of the international regimes are achieved when they are strengthened by national legislation further justifies this research. The paper will analyse the jurisprudence questions relating to investment arbitration under Nigerian law. The analysis will cover some of the issues such as: “How and when did investment arbitration evolve in Nigeria? What is its scope within the ambit of Nigerian laws? Is the legal framework really efficient and effective for maximum protection of foreign investment? To what extent do investment treaties promote investment arbitration in Nigeria? Is the legal regime for international investment arbitration adequate to facilitate business development and foreign investment?” The paper also suggests answers to these questions, including the way forward. The first part of the paper contains a general overview of investment climate, investment law and investment arbitration in Nigeria. The purpose is to ascertain how the international community perceives Nigeria’s investment climate and how Nigerian laws support this perception. In this context, the paper attempts an examination of the meaning, origin and jurisprudence behind investment arbitration in Nigeria. The second part of the paper will discuss how the jurisprudence behind investment arbitration has been translated to statutory laws and judicial decisions in Nigeria. This will be achieved by reviewing and analysing the Nigerian investment laws and cases. The third part of the paper will focus on the international law perspective of investment arbitration. This will probe how the Bilateral Investment Treaties (BITs), Multilateral Investment Treaties (MITs) and International Petroleum Agreements (IPAs) incorporated and promoted the Nigerian jurisprudence and perception of international arbitration in their various provisions. The paper will review some critiques of the legal framework; some significant concerns and challenges in this sector and conclude by proposing ways of resolving the challenges to enhance economic development in Nigeria.
Keywords: Law, Investment, Arbitration, Treaties, Nigeria, Agreement
JEL Classification: K
Suggested Citation: Suggested Citation