Overview
This Day | March 3rd, 2015
Proponents of a restrictive approach to alternative dispute resolution justify it on the ground that it somewhat defines, regulates and creates a level ground for the practice. Critics of that approach argue that it defeats the whole essence of arbitration and indeed other forms of ADR as a consensus driven means for the speedy resolution of disputes, with the parties having autonomy of how their disputes are resolved. I am of the view that it becomes an exercise in pretence if we downgrade arbitration (through action, inaction or indifference) to simply - a drama that precedes litigation or a forum where the State prescribes and dispenses what should be the mode of resolution of disputes outside of the Court system. It is received wisdom that arbitration accords more with the time value of money in commercial disputes as well as the desired confidentiality in sensitive cases; and for this reason and more, a deferential view is recommended.
In previous literature, I had argued that with much of the discussion on arbitration being largely centred on definition, appointments, and pre-award stages; a discussion on awards and protection of integrity of awards will not only fill an important gap in literature, it will fill in the gaps of policy and attitude of the Courts, counsel and parties to arbitration especially the loser (or less nicely put – the sore loser). Reducing the scope for setting aside arbitral awards in Africa (and more specifically, Nigeria) therefore helps the argument for increasing Africa’s share of arbitration emanating from home generated disputes. It deals with the reality as well as the perception issues, and the perception of the users of arbitration is as strong (if not stronger) than the reality.
In so contending, I was concerned that much of our arbitration is shipped off to Fleet Street, to the London Court of Arbitration and other fora. I was concerned that foreign direct investments would go elsewhere if the investors feared that they had no effective means (besides the courts) of resolving their disputes. This fear has now been resurrected by the likelihood of seeing the ‘National Alternative Dispute Resolution Regulatory Commission Bill 2011 (the Bill)’ becoming an Act of the National Assembly.
The Bill being pushed at the National Assembly seeks to create a Commission charged with the regulation of alternative dispute resolution (ADR) in Nigeria. ADR is an umbrella term for processes, other than judicial determination, in which an impartial person(s) assists those in a dispute to resolve the issues between them. It includes a wide spectrum of legal avenues like arbitration, mediation, negotiation, conciliation, neutral evaluation, mini-trial or a hybrid of any of these processes. The ADR system is built on the principles of fairness, timeliness, proportionality, choice, transparency, quality, efficiency and accountability.
The Bill aims to serve as an accreditation body for all ADR institutions and practitioners, set and maintain standards in training curriculum of these institutions; develop and constantly review rules and regulations for the practice of ADR in Nigeria and more notably, establish State ADR centres in all states of the Federation and the FCT. The requirement of accreditation to practice ADR in Nigeria will make it impossible for foreign ADR practitioners to freely come into the country to conduct proceedings on behalf of their Clients. This will in turn affect Nigerian ADR practitioners as other countries might be unwilling to offer them the opportunity to freely practice as well. Given the enormous benefits of ADR to our justice administration system, the sponsors of this Bill no doubt had the best intentions in proposing it. It is my view that government regulation of ADR by any agency or commission by its very nature is antithetical to the essence, substance and practice of ADR
The ADR system has its foundations in the principles of consent and voluntariness. It thrives on the voluntary consensual participation of all parties concerned. The establishment of a statutory regulatory body for a system that is voluntary and involves the consent and participation all parties concerned may not be a step in the right direction as it is inimical to the very essence of ADR. As indicated in the Bill, where the Commission has the power to appoint a Director of the State established ADR systems, the parties have little or no influence over who resolves their issue. This eliminates the all-inclusive element of ADR and if parties cannot choose or do not have the opportunity to choose who they consider suitable or competent to handle their dispute; they would lose confidence in the entire process.
Such a situation may have far-reaching implications for commercial transactions in Nigeria especially transactions involving foreign investors and non-state parties. They would seek independent proceedings in other jurisdictions like the London Court of International Arbitration, UK. If this is allowed to happen, Nigeria will effectively lose revenue from prospective investors and also gradually lose the practice of arbitration.
Another disturbing consequence of the provisions of this Bill is the potential incidences of abuse that may accompany the Commission’s power to appoint the Director of the state established ADR centres. The confidence reposed in the system by parties is reinforced by the impartiality of the persons resolving the dispute; therefore parties (particularly foreigners) may question the independence of the constitution of their panel of mediators or arbiters where it is possible that the Commission, through the Director, may influence the selection of individuals to that panel based on personal sentiments or selfish interests.
Presently, the ADR system is still at its early stages in Nigeria, despite the 27 year old Arbitration & Conciliation Act. The Lagos State multi-door courthouse, a concept birthed by Harvard Professor Frank Sanders, was the first established court-connected ADR system in Africa. Only Arbitration as a form of ADR has been substantially developed with a recognized and operational legal framework. That notwithstanding, there is a need to bring the Arbitration and Conciliation Act Cap A18, Laws of the Federation of Nigeria in line with international best practices to enable Nigerians compete on a level playing field with their counterparts.
In light of the foregoing, the enactment of another law where there is a similar legal and administrative framework in place may stifle legislation and encourage bureaucracy. I do not subscribe to the view (which is not backed up by any survey or statistics) that regulating the practice of arbitration in Nigeria would put us in a better shape. A preferable approach would be to improve on existing legislation, review and expand them to accommodate the other forms of ADR and maximize the present administrative systems for the purpose of implementation. A complete revamping of the existing legislation will place Nigeria on a good pedestal and one of the countries of choice for ADR proceedings. On a similar note, the role of the Courts ought to be facilitative and not disruptive of arbitral proceedings. Knowledge and institutional assistance become key factors in improving the quality of arbitration. Here lies the role and usefulness of a bodies such as the Lagos Court of Arbitration, Chartered Institute of Arbitrators Nigeria, Chartered Institute of Arbitrators UK (Nigerian Branch), Maritime Arbitrators Association of Nigeria, the International Chamber of Commerce, and others.
Dr Fabian Ajogwu, SAN is of the law firm of Kenna Partners
