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Alternative Dispute Resolution in Nigeria

07th April, 2020 at 10:30am
alternative-dispute-resolution-in-nigeria

Alternative Dispute Resolution (ADR) as the name connotes, is an alternate means of resolving disputes as opposed to the traditional routine of going to Court for the sole purpose of settling disputes.

Disputes are inevitable in every relationship; they may be civil, commercial or domestic in nature. In a bid to settle this conflict, the affected parties usually go to court in order to seek redress or to have the issue(s) resolved. These matters could be heard for about two years or more as a result of the complexity of judicial proceedings, copious amount of cases to be heard by a single Judge or Magistrate and the financial burden borne by the parties in trying to obtain justice. For the apparent inconvenience, a need to consider alternative methods of settling dispute arose.

According to Dr. Orojo;

"The term Alternative Dispute Resolution is used generally to describe the method and procedures used in resolving disputes either as alternatives to traditional dispute resolution mechanism of the court or some cases supplementary to such mechanism"

In Halsey v Milton Keynes General NHS Trust ,Justice Dyson defined ADR as;

"A collective description of methods of resolving dispute otherwise than the normal trial process"

The above are just few definitions of ADR, which portends that a common theme appears to be that ADR is a method or procedure used to resolve disputes.

The importance of ADR is now pivotal to the Nigerian Legal System. Section 19(d) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), provides for the settlement of disputes by Arbitration, Mediation, Conciliation, Negotiation and Adjudication. Order 19 of the Federal High Court (Civil procedure) Rules of Nigeria provides for supportive court interventions in arbitral proceedings. High Court Civil Procedure Rules of various States also provide for reference of cases to ADR, for example, Order 19 and 28 of the High Court of the Federal Capital Territory and Lagos State Civil Procedure Rules, respectively. Rule 15 (3)(d) of the Rules of Professional Conduct for Legal Practitioners mandates Lawyers to attempt an alternative dispute resolution before bringing any matter before the Court for hearing.

Alternative Dispute Resolution is the collective name given to the several methods of dealing with disputes without going to court. The methods used in ADR are negotiation, mediation, conciliation, arbitration, early neutral evaluation, facilitation, mini trials expert appraisal, summary jury trials, mediation-arbitration inter-alia.

It is expedient to state here that negotiation, mediation, conciliation, neutral evaluation amongst all others, are the non-binding ADR. The effect of a non-binding ADR is that the decisions reached are mainly consensual and the parties can decide not to be bound by them. On the other hand, Arbitration as an ADR mechanism is a binding ADR. In other words, the parties are bound by the decision reached by the Arbitrator.

MECHANISMS OF ALTERNATIVE DISPUTE RESOLUTION

Below are brief explanations of some of the mechanisms of ADR: 

  1. NEGOTIATION: 
    Negotiation is an informal bargaining process in which parties in dispute communicate directly to reach an agreement. It involves an interaction between two or more parties; either directly or through their representatives, where the issues surrounding the conflict are deliberated upon, for the purpose of solving the problem and or reaching a joint decision.

    This process requires thorough preparation, careful listening and an exquisite sense of timing on the part of the negotiator. Negotiation is one of the most common ADR mechanisms used in managing disputes and to reach a consensus under a friendly atmosphere.

  2. MEDIATION
    Mediation is said to be a facilitated negotiation involving the assistance of a neutral third party whose basic function is to engineer civility, facilitate candid discussions, and help the parties to reach consensual solutions. Its popularity is hinged on the premise that it promotes a win-win scenario where successful settlement leaves each party feeling like a winner. The mediator must be neutral and should ensure that the needs of both parties are met. The mediator is to guide the process as well as help both parties identify and concentrate on their major interests.

  3. CONCILIATION
    Conciliation is a method of settling disputes by consensus rather than by adjudication. It is the process whereby parties, through a third party identify the disputed issues, formulate options, explore alternatives and then try to reach an agreement. A Conciliator only plays an advisory role in formulating a framework for resolution of the dispute. Hence, the distinguishing factor between Conciliation and Mediation is the degree of intervention and influence of the third party in settling the dispute. The Conciliator goes a step further by drawing up and proposing the terms of an agreement, which in his wisdom, represents a fair settlement after hearing both sides while exploring the opportunity for settlement and helping them reach an agreed settlement.

    Conciliation in Nigeria is governed by The Arbitration and Conciliation Act Cap A18, Laws of the Federation of Nigeria, LFN, (2004) (the Act) which provides for the right to settle disputes by conciliation. Section 37 of the Act provides that the parties to any agreement may seek amicable settlement of any dispute in relation to the agreement by conciliation under the provisions of the Act.  In addition, Section 55 of the Act provides that parties to an international commercial agreement may agree in writing that a dispute in relation to the agreement shall be settled by conciliation under the Conciliation Rules set out in the Third Schedule to the Act 10.

  4. ARBITRATION
    Arbitration is a simplified process of trial without the technicalities of courtroom litigation; where the parties agree to appoint their own third party neutral known as the Arbitrator. The Arbitrator reaches a decision based on the Law, which will be binding on the parties. The decision reached is referred to as an Award. The case of MISR Nig Ltd. V. Oyedele defines arbitration as the reference of a dispute between two or more parties for determination after hearing both sides in a judicial manner by a person other than a court of competent jurisdiction.

    Arbitration is governed by the Arbitration and Conciliation Act Cap A18, Laws of the Federation of Nigeria, LFN, (2004) (the Act). This Act is based on the UNCITRAL Model Law and Incorporates the UNCITRAL Arbitration Rules. Also, the Act ratifies and incorporates the New York Convention Rules of 1976, and the Convention on recognition and enforcement of foreign arbitral awards of 1958 (New York Convention) on the recognition and enforcement of Foreign Arbitral Awards (NYC).

  5. MINI-TRIAL
    The mini-trial is a non-binding ADR process. This technique gives room for the disputants to be represented by their respective Legal Practitioners, who in turn present the matter to the representatives of the parties; usually executives of their organisation, who are authorised to enter into a settlement.

    After the attorney's presentations, the parties' representatives negotiate; if they are not able to reach a settlement, the neutral member of the panel will be asked to render an opinion on the merits of the case. The neutral's opinion is generally non-binding. There are no rules governing the conduct of mini-trials. The procedures are agreed upon by the parties in writing, before the initiation of the process.

 ADVANTAGES OF ALTERNATIVE DISPUTE RESOLUTION

  1.  It is confidential in nature
    All documents disclosed in an ADR process for the purpose of settlement are confidential and cannot be released to any third party without the consent of the parties or by an order of the court. However, in the process of arbitration for example, confidentiality does have its limits in that it is not always possible to ensure that witnesses maintain confidentiality unless they are required to sign a confidentiality agreement. The ADR procedure also ensures privacy, only the parties involved and their representatives are present at the meeting.
  2. It is cost effective
    Settling disputes through any of the ADR mechanism is affordable. One of the reasons for this is that parties will agree with their appointed third party on the scope, duration and scheduling of the whole process.
  3. It brings about quick dispensation of justice
    The ADR tribunal is faster than the court in reaching its decision. This is based on the fact that there is no issue of technicalities, the neutral party is available most times and some laws provide a time frame within which a matter should be heard. An example is the Rules of the Regional Centre Lagos, it prescribes a maximum of six months within which to conclude any arbitral proceedings. 
  4. It is flexible
    The ADR mechanisms are flexible as a result of its informality and simplicity. The parties are opportune to agree to their own procedure hereby reducing costs and delays. Its flexibility allows for the arbitral tribunal to conduct the arbitral proceedings in a manner it deems fair where no rules exists to cover a particular situation.
  5. Preservation of existing relationship
    Alternative dispute resolution helps to preserve the relationship that was existing between the parties before the dispute arose. It is advisable to make use of any ADR option where the parties have business or personal relations, they intend to preserve. The atmosphere is friendly and congenial; the parties can go with their relationship unimpaired as it is not entirely a win-lose situation.

CHALLENGES OF ALTERNATIVE DISPUTE RESOLUTION IN NIGERIA

In spite of the above advantages of adopting any of the mechanisms of ADR, the process is not without its challenges. Below are the major challenges hindering the growth of Alternative Dispute Resolution in Nigeria:

  1. Negative Perception and Attitude of Lawyers or Parties' Representatives
    A major challenge are Lawyers who see Litigation as a means of generating surplus income, they discourage settlement out of court simply because it's not exactly financially beneficial to them. A matter being transferred to the Court will result in the Lawyer obtaining appearance fees, filing fees and other billable services. Hence, we find that clients are wrongly advised by their Lawyers or representatives to resist compromises during ADR proceedings so as to have the matter transferred to the Court for another hearing.
  2. Lack of Awareness on the Subject
    ADR has not assumed a significant status in our legal culture as seen in U.S.A or England. This is due to the fact that the benefits derivable from ADR and its successes so far has not been made known to all. This issue will always be a clog to the success of ADR in Nigeria.
  3. Non-binding nature of ADR
    The non-binding nature of ADR such as mediation, negotiation and conciliation sometimes renders the proceedings pointless as the parties can still resort to the court to reach a binding decision on their behalf. Because of this, most ADR processes are not result-oriented as parties and lawyers may get into it half-heartedly.

    However, regardless of the challenges mentioned above, the use of ADR is still experiencing growth in Nigeria as evidenced by the provisions of the aforementioned statutes and the establishment of the Lagos Multi-Door Court House; a Court House created for the purpose of settling disputes by ADR. Today, most commercial disputes are resolved through ADR hereby decongesting the court of a number of cases.

In conclusion, it is said that the Law is dynamic. As the society evolves, there is always a need for the Law to catch up with its pace. Alternative Dispute Resolution is a process, viewed as a way of improving access to justice for members of the public through its flexible, less expensive and speedy proceedings as opposed to the lengthy and time consuming court trial. It is only rational that this means of resolving dispute is fully embraced.

Written by: A.F. Adenekan, Esq.

Ogbiti, P.O; "Reasons for the Increasing Acceptability of Alternative Dispute Resolution Mechanism(ADR) in Nigeria" presented at a seminar themed "Construction Arbitration for quality Surveyors & other Professionals"- June 2015, p.4
(2004) E.W. CA 576
EUNICE R.  ODDIRI (MRS.): "ALTERNATIVE DISPUTE RESOLUTION" 22ND- 27TH AUGUST 2004. Cited in Accessed 5th February, 2020.
Ibid. Accessed 5th February, 2020.
Johnson & Shasore Supra at p.37
Ogbiti supra at p. 34
Anago  I.F, "Improving the Performance of Judicial officers: The Use of Alternative Dispute Resolution Systems" presented at a meeting held at National Judicial Institute, off Umaru amusa Yar'dua express way, Abuja on 25th-26th  May 2015. P.6
Johnson, C.C.A & Shasore O, "Commercial Arbitration Law and International Practice in Nigeria(Cape Town, LexisNexis,2012)pg.223.
EUNICE R.  ODDIRI (MRS.): "ALTERNATIVE DISPUTE RESOLUTION" 22ND  - 27TH AUGUST 2004. Cited in Accessed 5th February, 2020.  Abugu Supra at p. 43
Idigbe A, "Arbitration Practice in Nigeria"(Lagos, Distinct Universal Limited,2010)p.3
Abugu, C.U, "An agenda for Enhanced Medical Malpractice Claims in Nigeria", Phd  Thesis, Faculty of Law, University of Abuja. Cited by EUNICE R.  ODDIRI (MRS.): "ALTERNATIVE DISPUTE RESOLUTION."22ND  - 27TH AUGUST 2004. Cited in Accessed 6th February, 2020.
Anago  I.F, "Improving the Performance of Judicial officers: The Use of Alternative Dispute Resolution Systems" presented at a meeting held at National Judicial Institute, off Umaru amusa Yar'dua express way, Abuja on 25th-26th  May 2015. P.6
EUNICE R.  ODDIRI (MRS.): "ALTERNATIVE DISPUTE RESOLUTION." 22ND - 27TH AUGUST 2004. Cited in Accessed 6th February, 2020.   
Ibid. accessed 6th February, 2020.
Ibid. Accessed 6th February, 2020.