and other financial institutions, and insurance companies. The rate payable is 1% of pre-tax profits and is deductible when computing the income tax payable by the company. Industrial Training Fund The purpose of this fund is to promote and encourage the acquisition of skills in industry or commerce in Nigeria with a view to generating a pool of indigenous trained manpower sufficient to meet the needs of the economy. The legal basis of this fund is expressed in the Industrial Training Fund Act 1971 ( ITFA ), and the subsequent amendment in 2011. ITFA prescribes that employers with a minimum of 5 employees or an annual turnover of NGN50million and above are required to contribute 1% of the payroll. Dispute Resolution Litigation Disputes in Nigeria may be settled by litigation through the courts or alternative dispute resolution ( ADR ) methods such as arbitration, conciliation, or mediation. Litigation claims are determined by the Magistrate/District Courts (small claims), High Courts (Federal High Court or States High Courts) and the National Industrial Court (NIC). There is at least one High Court in each state and these have jurisdiction to hear and determine any civil proceeding, save for those matters which come within the exclusive jurisdiction of the Federal High Court as set forth in Section 251 of the Nigerian Constitution. Notably, the Federal High Court’s enumerated jurisdiction includes matters: (i) arising from the operations of CAMA, (ii) connected with or pertaining to the taxation of companies, and (iii) relating to customs and export duties including any claim by or against the Nigerian customs service, and other specifically enumerated provisions. As stated above, labour-related matters are determined exclusively by NIC. Appeals from the Magistrate/District Courts go to the High Courts, while appeals from the High Courts and NIC go to the Court of Appeal. However, appeals to NIC decisions are limited, however, and are limited to decision which relate to questions of fundamental rights as contained in Chapter IV of the Constitution or in criminal cases where the NIC has jurisdiction Appeals from the Court of Appeal go to the Supreme Court, whose decisions cannot be appealed. Arbitration In accordance with the Arbitration and Conciliation Act ( ACA ), Nigeria is a signatory to the New York Convention
which facilitates the enforcement of foreign arbitration awards in this jurisdiction. ACA, which is based on the UNCITRAL Model Law, establishes the legal procedures to settle commercial disputes through arbitration and conciliation. Nigerian courts treat arbitration agreements as binding and will ordinarily decline to entertain disputes subject to arbitration except in the following instances: • where the parties agree to cancel the agreement; • where the aggrieved party does not object timeously to the other party’s resort to litigation in a timely manner, in which case the arbitration agreement would be deemed to have been waived; or • where the subject matter of the dispute cannot be resolved by arbitration. • Arbitral awards are also final and binding on the parties and will always be enforced by Nigerian courts. However, there are limited grounds upon which an award may be set aside, such as where: • the arbitration agreement is not valid; • the composition of the arbitral tribunal was not in accordance with the agreement of the parties or in accordance with ACA; • the award deals with matters not submitted to or outside Lagos state, which is the financial and economic centre of Nigeria, also has its own arbitration law which is the Lagos State Arbitration Law. The procedure under this law has been identified as the most straightforward of all the options for enforcing foreign arbitral awards in Nigeria. This is due to the fact that this law provides an automatic recognition for awards irrespective of the jurisdiction or territory in which the judgments are made. Furthermore, the application for enforcement is to be made by the applicant in writing to the High Court of Lagos State and is enforceable in the same manner as a judgment of the High Court of Lagos State, provided that leave of the High Court is sought and obtained prior to enforcement. It is worth noting that the International Centre for Settlement of Investment Disputes ( ICSID ) Enforcement of Awards Act provides that awards made by ICSID have the same effect as a judgment of the Supreme Court of Nigeria and is to be filed in the Supreme Court for enforcement. This means there is no right of appeal against ICSID awards. the scope of submission to arbitration; and • the award is against public policy in Nigeria.
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