August 22, 2018

Supreme Court's Role In Ease Of Doing Business: International Arbitration In Focus

- Osaro Eghobamien SAN, Managing Partner [ Perchstone & Graeys ]


Recently, when the Apex Court held that international lawyers could fly in and fly out to conduct arbitration cases in India, it proved that the SCI is alive to its role as a court of policy...

The Supreme Court’s role as a policy court is inherent in its powers in interpreting laws, while at the same time recognizing that law-making is exclusively the preserve of the legislature. Its role in policy-making is more evident when called upon to adjudicate over novel and complex issues, requiring new solutions to problems presented to it. The Indian Supreme Court reinforced its policy-making role in the recently decided case of the Bar Council of India v Balaji and Ors, where it was called upon to interpret the equivalent of the Nigerian Legal Practitioners Act that restricts the practice of law to those who are enrolled to practice law, within its own local jurisdiction. The court held that international lawyers could fly in and fly out to conduct arbitration cases in India. By this singular decision, the court increased the chances of India becoming the hub of international arbitration in Asia as well as its ranking in the World Bank’s comparative rating index in the ease of doing business among nations.

The Balaji case (Bar Council of India v A.K Balaji & Ors) is a landmark decision and will have a revolutionary effect on the practice of law in India. Hopefully, it will also set a precedent in other emerging economies including Nigeria.

The Indian Supreme Court gave a robust consideration to the issues canvassed by the parties and ruled in favor of the Bar Council, stating that the right to practice law, whether in litigious or non-litigious matters, is the exclusive preserve of advocates enrolled with the Bar Council. It, however, distinguished between the practice of the profession of law and casual visits by foreign lawyers on a “fly-in and fly-out” basis. It held that these casual visits by foreign lawyers for conducting international arbitration proceedings or providing advice on foreign law or international issues may not be covered by the expression “practice” of law. The question was one to be determined on a case-by-case basis, dependent upon the frequency of such visits. If the frequency and nature of such casual visits became such as to transpose the nature of legal services provided into “practice of the profession of law” in India, then foreign lawyers would be barred from engaging in such services.

The decision of the Supreme Court of India in this case was ingenious, having as its underlying philosophy the promotion of international trade. It charged the Bar Council to make appropriate rules in this regard and held that foreign lawyers offering legal services or practicing foreign law in India were also bound to the regulatory mechanism of the Bar Council of India Rules. The Indian decision featured strong policy elements, particularly the desire of the government to make India a hub for international commercial arbitration. A foreign businessman can now heave a sigh of relief, knowing that he can freely do business in India, and in the event of a dispute, he can be represented in the Indian International Court of Arbitration by a counsel of his choice.

These kind of considerations demonstrate that the Supreme Court of India is alive to its role as a court of policy, with the duty to not only decide disputes before it but also resolve disputes in a way that reflects the importance of the issues to a larger segment of the society. Viewed in this light, barring foreign firms from conducting arbitrations in India would have been strongly against the national interest. One wonders how a similar issue would have been decided in a country like Nigeria, where Judges have openly held anti-liberalization views on not just arbitration but many other facets of globalization as it impacts the practice of law.

Many of the Nigerian Supreme Court’s recent decisions have been based on technicalities and not substantive justice. An extremely brilliant retired Supreme Court Judge, Justice Ayoola, made this point at the SPA Ajibade 10th Annual Luncheon held on December 14, 2017. His Lordship said: “When you get to the Court of Appeal, when you get to the Supreme Court and when you look at the index of the Supreme Court, you find that 90% of the reported cases coming before the highest courts are all about technicalities and procedure, absolutely nothing about substantive law cases”. For instance, there is a disturbing Nigerian Supreme Court decision handed down some years ago (See Okafor v Nweke [2007] 10 NWLR [Pt. 1043] 521) and which has since then been upheld severally. It is to the effect that where a legal practitioner signs an originating process in the name of a law firm rather than his own name, the entire suit is liable to be struck out, even after traversing the appellate ladder to the Supreme Court. This principle of effectively nullifying a lengthy legal process over a technicality is now being extended to arbitration processes signed by foreign lawyers. Substantive justice has taken a backseat to technicalities.

It is difficult to play a role as a policy court when the number of cases in your docket rivals that of a magistrate or high court. This unbearably heavy case load, for the Nigerian Supreme Court, has left in its wake many casualties – notably, litigants

It may be argued that a Supreme Court which fails to play a policy role has abdicated its most primary function. This is not necessarily an intentional abdication. In the case of Nigeria’s Supreme Court, it may simply be a question of being overworked. The Supreme Court of Nigeria decides close to 500 cases each year, sometimes delivering up to 10 judgments in a single day. By stark contrast, between April 2016 and March 2017, the United Kingdom’s Supreme Court received 209 applications for permission to appeal. About a third of those applications were successful, resulting in 67 appeals heard and determined by that Court during the entire legal year. Similarly, of the near 10,000 petitions for hearing received by the United States Supreme Court each year, it will usually hear about 1% of the cases, amounting to no more than 80 to 100 appeals. It is difficult to play a role as a policy court when the number of cases in your docket rivals that of a magistrate or high court. This unbearably heavy case load, for the Nigerian Supreme Court, has left in its wake many casualties – notably, litigants.

That is not to say that it is impossible to deliver thoughtful and progressive decisions, simply due to a heavy case load. The Supreme Court of India also deals with a startling amount of cases each year. According to statistics provided on its website, as of November 2017, that court had 55,259 cases pending before it. Perhaps one reason it has been able to better keep up with the responsibilities of its case load is that its 31 Judges sit in smaller Benches of 2 and 3 Judges. This seems to make for more effective hearing and dispensation of cases, though it does also result in significant delays. The Nigerian Law Reform Commission (“NLRC”) might have helped to limit the number of cases the Supreme Court of Nigeria has to determine by constantly reviewing the laws and taking urgent action where there is a disconnect. However, the NLRC does not seem to be vibrant in discharging the mandate of reviewing laws to ensure that they keep pace with the development of the Nigerian society.

The death of oral advocacy in the Nigerian Supreme Court further compounds the problem. When counsel, including senior counsel, appear before the Supreme Court in Nigeria to argue a client’s cause, the learned Justices insist that counsel simply adopt their briefs. This is after the Court itself has spent valuable time contending on what processes are in the Court’s file and those that have been regularized (many of these matters are easily outside counsel’s control, and at any rate, could simply be dealt with before the Registrar in a more appropriate setting). Counsel’s insistence on persuading the Court that there are some complexities that require oral explanation transforms the otherwise friendly atmosphere, making it impossible to argue fine points of law. Understandably so, considering that on an average day, the Court may be faced with 5–6 appeals, each requiring their Lordships to study volumes of appellate records, running into thousands of pages. There is always the promise that the huge volume of records will be read and digested before the judgment is delivered. In a fast-developing world driven by technology, there are many complex issues that require explanation beyond the cold prints in any written brief. Sadly, the Supreme Court is dogmatic in its approach and unintentionally denies itself the opportunity of subtle but effective contention.

The Indian decision serves as a blueprint of sorts for Nigeria. The latter also wants to be a hub for commercial activity. With the recent reforms in business ease in Nigeria, it is well on its way. But the courts, particularly the Supreme Court, have a greater role to play than they are currently taking on. It is inimical for any country wishing to enhance the flow of trade across its borders, to have a court system that may appear not to be in tune with international commercial reality. It is rumored that in a recent arbitration, foreign lawyers were denied the opportunity to appear, the Arbitrators relying on the Supreme Court’s general philosophy. Permitting a limited entry of foreign lawyers, particularly in arbitration, is commendable and progressive. For starters, international business persons and companies should be able to select foreign firms and lawyers to represent them in international arbitrations. This is done in other countries all around the world – now including India.

There is not much that is gained by taking an overly restrictive approach, but there is much that is lost. Systematic liberalization, putting foreign lawyers side by side with local counsel (many of whom represent clients outside Nigeria on international arbitrations), would undoubtedly raise the quality of legal services on offer from local counsel. This only makes business sense. At present, foreign firms are perceived as circumventing the system, by operating behind the shadows in arbitrations in Nigeria. They prepare the documents and arguments on behalf of their international clients, collect huge fees, and pay local lawyers a pittance to rubber stamp what they have done. There is no opportunity for local lawyers to enhance capacity by working alongside their foreign counterparts. The Nigerian legal system is the poorer for it.

India has improved recently in the ease of doing business amongst nations. So has Nigeria. However, in the area of judicial pronouncement by the Supreme Court, we have sadly, in recent times, not had any jurisprudential exposition directing the business world, with most cases decided on procedure with which the business world is unable to connect. It is restating the obvious that the Supreme Court shapes the society by determining the direction in which important issues will be decided by other courts of inferior jurisdiction and tribunals. It is conceded that law courts typically should seek, for the most part, to operate within a procedural setting, but that should never supersede substantial justice. The Nigerian Supreme Court cannot remain immutable or isolated from commercial realities in the face of a rapidly changing world.

Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.

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