Greg Nwakogo

It was Andrew Johnson, the 17th President of the United States who said that ‘Legislation can neither be wise nor just which seeks the welfare of a single interest at the expense and to the injury of many and varied interests’. This truism could be said to be descriptive of the bill presently before the National Assembly to establish the National Alternative Dispute Resolution Commission, which did not consider inputs from stakeholders from conception until this time having been passed as law by the lower legislative chambers and is in the process of getting the accent of the upper legislative chambers. The bill which has scaled through the House of Representative and presently before the Senate, seeks to establish a Commission with the responsibility to regulate through the process of accreditation, all Alternative Dispute Resolution bodies and institutions engaged in the practice, training, education or skills acquisition in alternative dispute resolution mechanism and to develop and maintain relations with international Alternative Dispute Resolution bodies and organisations with a view to attaining best international standards and practices in the field of Alternative Dispute Resolution, amongst other things. The bill if passed into law seeks to create Alternative Dispute Resolution Centres in States of the Federation to promote and co-ordinate the practice and use of Alternative Dispute Resolution in the States of the Federation. See sections 7(i) & (vii). The letters of the proposed law sound nice to the undiscerning reader but the bill in a nutshell seeks to empower the government to regulate the private rights of citizens to resolve their disputes by their own methods.

Alternative Dispute Resolution refers broadly to methods through which parties may resort to resolve their disputes through private means. This may include negotiation, mediation, arbitration, and other hybrid processes. The fundamental features of arbitration and most other alternative dispute resolution mechanisms are that it is an alternative to national courts, it is a private mechanism for dispute resolution, it is selected and controlled by the parties and it is a final and binding determination of parties’ rights and obligations. The bit on finality of determination of the parties rights however would seem to apply to only arbitration. Thus if parties agree to resolve their disputes by arbitration, the parties have accepted that not only will the parties resolve their disputes through that means but also that they will accept and give effect to the determination of the arbiter they have appointed.

Arbitration like the other forms of Alternative Dispute Resolution (ADR) is an alternative to the national courts. National courts are a manifestation of state power and the responsibility of the state to ensure that courts exist, that appropriately qualified judges are appointed and that there are procedural rules to regulate the basis of jurisdiction and the conduct of cases before the court.  Arbitration as known and practiced globally is not a national court procedure. When parties have agreed to arbitration they remove their relationships and disputes from the jurisdiction of state courts.

In arbitration like other forms of ADR, disputes are resolved in a private system agreed between the parties subject to certain safeguards. Also very fundamental in arbitration is the fact that it is chosen by parties. Party autonomy is the ultimate power that determines the form, structure, system and other details of arbitration. National arbitration laws only seek to give effect to, accentuate, and support the agreement of the parties.

Accreditation of arbitration and ADR bodies and institutions engaged in practice training, education or skills acquisition in alternative dispute resolution mechanisms as the bill seeks to do will fundamentally amount to the meddling by state in the private rights of citizens to resolve their disputes by their own methods. Whilst formal training may enhance the ability of an arbitrator in resolving disputes that would not be successfully challenged in national courts, the arbitrator does not as of a rule require formal training to be able to act as such. As practiced globally, where the issues for determination are those of fact, personal qualities may become more relevant in choosing an arbitrator than professional qualification. Whereas where the issue for determination in a dispute is one that is technical, requiring special expertise, the possession of such special skill would make the arbitrator’s job easier, but it must be noted that arbitrators do not have to be certified to be appointed, so long as it is the choice of the disputants. It would therefore be preposterous for our law makers to envision a situation whereby arbitrators have to be accredited by a commission.

How do you for instance regulate negotiation which is basically formal discussions between parties who are trying to reach an agreement; or even mediation which is the facilitation of these discussions by a third party with a view to helping the parties reach an agreement? The absurdity in this is laughable and it is no less so in Arbitration for indeed it is historically ingrained in our custom for arbiters to be approached by disputants to help them resolve their disputes. The very idea of government intervention in citizen’s right to resolve their disputes in the manner envisioned by the proponents of this bill is absurd in every way, shape or form.

If this monstrous bill is allowed to be passed into law it would appear to be hindering international trade. Arbitration is a truly international practice. Parties may appoint arbitrators from any jurisdiction and may choose procedural rules that are familiar to both sides. Parties are also allowed by the same principle of party autonomy to conduct their arbitration in a country different from the countries of the parties and in the same light may appoint nationals of a state other than that of the parties as presiding or sole arbitrator. The proposed bill will tend to remove Nigeria and Nigerian practitioners from this global practice. This is because any country whose law regulate the sphere of arbitration and alternative dispute resolution in this manner is seen as not being arbitration friendly and would be ostracised in the global scheme of things as far as arbitration and alternative dispute resolution is concerned. Nigerian nationals would therefore seize to get appointments as arbitrators in disputes involving other nationals and also Nigeria will rarely be designated a seat (venue) of such arbitration.

It is also foolhardy to imagine that it would be practical for the commission which the bill intends to establish to be able to accredit or regulate international arbitration bodies such as the ICC International Court of Arbitration, Paris or the London Court of International Arbitration, London. This is because parties are allowed by international practice to decide by agreement who should settle their disputes.  It would appear that indeed the proponents of this bill know little or nothing in the sphere of arbitration and alternative dispute resolution generally for there are so many questions that beg to be answered. The bill in its present state does not suggest that the accreditation which the commission will be empowered to carry out will be restricted to Nigerian ADR institutions. We belong to a global community and arbitration by its very nature is international in approach. Does the bill envision that the commission would accredit foreign ADR bodies which Nigerian parties may have recourse to for the resolution of their disputes? Is it expected that these foreign ADR bodies will submit themselves for accreditation by this Nigerian commission?

Arbitration is a catalyst for international trade; there is a direct correlation between arbitration friendly legal regimes and foreign direct investment in that when business people enter into foreign trade and investment transactions the possibility of future disputes is seen as a risk of the transaction. This risk is even amplified when businesses cannot be certain that reliable procedures are available to resolve any such dispute promptly and fairly, such as is the case of the proposed bill. When risk is increased because effective dispute resolution procedures are not available, businesses react in one of two ways: either they refuse to enter into the transaction because the risk is too great, or they raise the price to compensate for the additional hazard. In either event, the free flow of trade is hampered. On the other hand, when businesses are confident that laws and procedures exist so that disputes can be resolved efficiently, the conduct of international trade and foreign direct investment is facilitated. It would appear therefore that the proposed bill is in direct conflict with the policy of the present government which seeks to encourage and improve foreign direct investment.

In conclusion it would appear that the spirit and letter of the proposed bill is in total variance to the jurisprudence of arbitration and alternative dispute resolution and same would be an impediment to the attraction of foreign direct investment in Nigeria. The same would also be detrimental to practitioners of ADR who will be taken backward in their careers and would no longer be able to compete with colleagues in other climes. Nigeria will seize to be destination for arbitration. The bill if passed into law will also erode the private rights of citizens to resolve their dispute as alternative dispute resolution is self regulatory globally. The bill is in total conflict with international best practices in arbitration and should be stopped from being passed into law.

Mr. Greg Nwakogo is the Managing Partner of Rosberg Legal Practitioners & Arbitrators

 

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