A CRITICAL INVESTIGATION OF ARBITRATION AS AN ALTERNATIVE MEANS OF DISPUTE RESOLUTION IN NIGERIA

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A CRITICAL INVESTIGATION OF ARBITRATION AS AN  ALTERNATIVE MEANS OF DISPUTE RESOLUTION IN  NIGERIA 

 

ABSTRACT

The fulcrum of this research is on the critical examination and evaluation of arbitration as an effective means of Alternative Dispute Resolution (ADR) mechanism in Nigeria. Arbitration, no doubt, has been prided as the most used ADR mechanism both domestically and internationally. Being promoted as one of the most effective means of settlement of disputes outside of the formal judiciary court, it has been known to stand the test of time in resolving major societal disputes in Nigeria. This work posits that despite its popularity and wide recognition among the spectrum of dispute settlement mechanisms, arbitration has not possessed a default status of universal applicability in all aspects of societal disputes. Peculiar circumstances tend to undermine the efficacy and effectiveness of the arbitration mechanism considered under the light of some dominant factors existing in Nigeria. The descriptive research design employed for this research was conceptually innovative. The research adopted the Modern Theory of Conflict Management in establishing its theoretical foundation with the use of available literature on a series of random arbitration proceedings in Nigeria. Some principal characteristics of arbitration acknowledged through the work include the consensuality involved, the voluntariness, neutrality, confidentiality, and finality of the award among other veritable qualities. Findings reveal a combination of militating factors against the practicability of arbitration as an ADR mechanism in settling disputes in Nigeria. The conclusion is drawn on the irrefutable fact that all mechanisms in the dispute resolution spectrum, including arbitration, have their benefits and lacunas. Hence, the efficacy and effectiveness of any given mechanism are most often determined by the facts and peculiar circumstances associated with the particular case in question. Suggestions and recommendations advocate for a combination of the current trending arbitral hybrid processes and canvass for practitioners to possess advanced knowledge, requisite skill, cognate experience, and expertise to be able to perfectly determine and adopt the mechanism that best suits any given case.

 

 

CHAPTER ONE

GENERAL INTRODUCTION

1.   BACKGROUND TO THE STUDY

Disputes are an inevitable occurrence in our society today because we live in a world of human interaction and commercial transactions.[1] Since time immemorial, there have been squabbles here and there, and when these disputes or conflicts arise, there is an urgent need to resolve them to avoid anarchy and live in harmony, peace, and order.

One of the ways disputes can be settled without recourse to violence is, without a doubt, recourse to the rule of law, as represented by the state court system.[2] This judicial system is open to all citizens and operates independently of the other branches of government. Hence, the law is indispensable in every society. Law in this way has both preventive and curative functions, such that it provides for deterrence from crime and civil wrongs whilst it provides for retribution for crime, and remedies for civil wrongs, in the event of disobedience.[3]

As a curative function, the law has provided an avenue where disputants could resort to a court of law for litigation, which is the conventional method of resolving disputes. However, due to cost, expertise, uncertainties of the outcome, time, and backlog of cases, among other things, incurred in litigation, people have lost confidence in the court system, and this has, in turn, resulted in the resolution of disputes through alternative means outside of the formal court procedure.[4]

As a matter of fact, with time, people have preferred Alternative Dispute Resolution (ADR) such as Negotiation, Conciliation, Mediation, Arbitration and so on over and above litigation on such grounds that it is cheaper, less time-consuming, confidential, informal, and in most instances, a friendly means of resolving disputes.[5]Arbitration is one of the various means of settling disputes without recourse to litigation, and it has become the main alternative to resolving or determining commercial disputes.[6] ADR has achieved significant acceptability in trade and economic disputes to the point where, in some jurisdictions, the High Court Civil Procedure Rules now require parties to use some kind of ADR, generally mediation, before their cases may be adjudicated.[7]

The question now is: to what extent is Arbitration considered an effective means of settling disputes in a society like Nigeria? This question has indeed been a fundamental question that this research work is poised to answer through a critical examination of the cause and effect of Arbitration as an effective means of ADR towards resolving societal disputes in Nigeria.

2.   STATEMENT OF THE PROBLEM

The fundamental problem considered by this research in its approach for examining the adoption of Arbitration as an alternative means of settlement of a dispute is explicated below.

The legal system aims to provide justice. The Nigerian Constitution makes provision for the right of access to justice in s36(6).[8] The provision of justice is further accentuated in the Nigerian legal system by the Administration of Criminal Justice Act, which provides the speedy dispensation of justice as one of its purposes. However, there has been a prolonged dispensation of justice in Nigeria over the years. Court cases now outweigh the decided ones due to the daily increase of disputes and the time it takes to get the case through the regular court.

It has also been observed from a survey report that the desire of most people from our modern justice system is to avoid going to court (court phobia).[9] Most problems associated with litigation include illiteracy of the law and the legal system due to its complicated language and quaint procedures and the ill faith in the court’s fairness or its efficiency as a means of resolving disputes.[10] Also, this is associated with factors such as high costs, the endless delays, the tottering heaps of papers that take over their lives; therefore, litigants seem to prefer a more straightforward approach: a process conducted in plain language, based on common sense, and geared to getting problems sorted out in a roundtable rather than in the hot atmosphere of the courtroom.[11]

The problem of this research is hinged upon the fact that Arbitration, having emerged as an alternative means of dispute resolution beyond the formal process of litigation, still enjoys no default status of universal applicability in all aspects of societal disputes. Practical as it may be against litigation and court settlement processes, issues still abound on the grounds of the application of Arbitration as an Alternative Dispute Resolution (ADR) to all forms of societal disputes and in all jurisdictions of which Nigeria is not an exemption.

Against the backdrop of the above situation, the research verifies the extent of Arbitration’s applicability as an ADR mechanism in Nigeria.

3.   RESEARCH QUESTIONS

This research work seeks to answer the following questions:

  1. How has Arbitration evolved in Nigeria?
  2. What is the current legal and institutional framework for Arbitration in Nigeria?
  3. To what extent can Arbitration be considered an effective means of dispute settlement in Nigeria?
  4. To what extent has Arbitration gained universal applicability in societal disputes resolution in Nigeria due to its widespread acceptance as an effective means of ADR?
  5. What factors affect the successful application of Arbitration within the Nigerian justice system?
  6. What remedies and improvements must be incorporated into the process of

Arbitration in Nigeria for a better dispute resolution strategy?

4.   AIM AND OBJECTIVES

This study aims to evaluate Arbitration as an alternative dispute resolution mechanism in the settlement of disputes in Nigeria. Thus, the fundamental objectives of this research work are

to:

  1. To provide an overview of the concept of Arbitration and its evolution in Nigeria.
  2. To explore the current legal and institutional framework of Arbitration in Nigeria.
  3. To examine the effectiveness of Arbitration in settlement of disputes in Nigeria.
  4. To examine the applicability of Arbitration to all societal disputes in Nigeria.
  5. To examine the challenges with the successful application of Arbitration within the

Nigerian justice system.

  1. To provide necessary remedies and essential improvements that need to be incorporated into the modern Arbitration processes for a more effective resolution outcome in Nigeria.

5.   SCOPE AND LIMITATION OF THE STUDY

This research focuses on an in-depth analysis of the concept of Arbitration as an alternative dispute resolution mechanism and its effectiveness in resolving disputes in Nigeria.

LIMITATIONS:

  1. Time Constraint: This is a significant limitation to this study because the researcher will be working on this research while also doing other academic tasks. As a result, the amount of time spent on research will be reduced.
  2. Furthermore, the legal grey areas that are not entirely covered by the enabling laws and instant legislations serve as a limitation to this study.

6.   SIGNIFICANCE OF THE STUDY

The importance of this study cannot be overstressed. This study contributes significantly to the already existing knowledge of Arbitration in Nigeria. It provides helpful information to law students, legal practitioners, judges, arbitrators, and the general populace on the importance and effectiveness of Arbitration in resolving disputes.

This study provides remedies and innovations to be incorporated into the modern Arbitration processes for more effective resolution outcomes. The information gathered in this study offers light on several socio-economic and development issues that can be investigated

further in the future.

The research is beneficial because the information collected will contribute to a better understanding of how disputes can be settled outside of courts through Arbitration without much acrimony associated with litigation. This study will also aid future researchers in researching the resolution of disputes using Arbitration in the future.  

7.   RESEARCH METHODOLOGY

The research methodology applied in this research work is the doctrinal research methodology, also known as Armchair research. This research methodology fits this research work and is applied because it involves the application of both primary and secondary sources of law. This research paper uses relevant statutes, case laws, treaties, textbooks, articles, and other materials from the internet, when necessary, to carry out a critical evaluation of the subject matter. This paper also applies the analytical research method by exploring Arbitration in Nigeria by analysing the information gathered from the sources mentioned, which form the basis for the recommendations and conclusion of this research paper.

8.   LITERATURE REVIEW

Arbitration, as one of the oldest procedures for resolving disputes between conflicting parties, has been recognized by scholars to have existed in some form or another in every country at some point in history. Arbitration as a procedure of dispute resolution offers various advantages to both parties in any particular dispute, according to the extant literature in the field of ADR herein understudied.

Moses[12] described Alternative Dispute Resolution (ADR) as the process of settling disputes outside of the court system in his book. It encompasses a wide range of methods that can be tailored to meet the individual needs of disputing parties, with each process serving as an alternative to litigation. These processes can be used separately or in combination with others, but they all focus on bringing disputing parties together, diffusing adversarial negotiations through an impartial third party, and mutually agreeing on terms of the settlement, whether it is for resolving family disputes, territorial disputes, landlord-tenant conflicts, or expensive commercial disputes.

According to Okoye,[13] ADR allows for a flexible settlement that considers issues such as the parties’ interests and requirements, allowing them to continue their relationship despite the dispute. As a result, the phrase refers to a set of methods aimed to help parties in resolving their conflicts without resorting to formal court proceedings.

Idornigie[14] in his book, “Commercial Arbitration Law and Practice in Nigeria” noted that Arbitration is distinguishable from the other forms of dispute resolution mechanisms/ processes. It is adversarial in nature just like litigation while the other alternative dispute resolution mechanisms are non-adversarial or consensual. He also stated that however, to some extent, arbitration is consensual in the context of the principle of party autonomy.

Ajogwu[15] in his book, “Commercial Arbitration in Nigeria Law & Practice”, pointed out that unlike the regular courts, the arbitral tribunal does not have a role to play in the enforcement or execution of its award. Once, the award is given, the arbitral tribunal becomes functus officio. Usually, the only situation where an arbitral tribunal acts after the delivery of an award is where it is expected to correct, interpret or clarify its award.

According to Thomas[16] in his article “Arbitration: The New Litigation,” ADR has a wide range of applications and uses; provisions for binding arbitration of disputes are now found in practically all types of contracts, making arbitration a versatile substitute for civil litigation.

Ranging from family, customary, and environmental problems to commercial disputes. However, the primary focus would be on the applicability of ADR to the resolution of all disputes.

Akpata[17] gives an overview of the development of ADR in Nigeria from pre-colonial times to the current day, as well as a history of statutory enactments in Nigeria and commentary on all portions of the relevant statutes. He drew heavily on his experience as a judge in his remarks.

The article of Olowu[18] is important in terms of judicial intervention in the ADR process because it establishes that appropriate judicial intervention in the ADR process is not invariably inconsistent with the disputants’ interests because the courts usually provide some form of assistance that seems to guarantee the efficiency and effectiveness of the process.

From the aforementioned, the scholars on this area have made laudable attempts in exploring Alternative Dispute Resolution particularly- Arbitration and distinguishing it from other dispute resolution mechanisms. However, the effectiveness of Arbitration in Nigeria was neglected by the scholars. This gap shall be filled in this study.

9.   SYNOPSIS OF THE CHAPTERS

This research work contains five chapters.

Chapter one provides the general introduction of the research work. It serves as the pillar of the research because it deals with the background of the study, statement of the problem, the questions that this research will answer, aims and objectives, scope and limitation of the study, the research methodology, literature review as well as the layout of the paper.

Chapter two focuses on the conceptual clarification of Arbitration, its characteristics, the various types of arbitrable disputes, its advantages and disadvantages, and the historical background of Arbitration in Nigeria.

Chapter three analyses the legal and institutional framework of Arbitration in Nigeria. It explores the domestic as well as the international laws that are applicable in Nigeria.

Chapter four borders on the analysis of the process of commencing an Arbitration, the differentiation of Arbitration from Litigation, the enforcement of arbitral awards, and the effectiveness of Arbitration in Nigeria.

Chapter Five, which is the final chapter, focuses on the summary of the principal findings of this paper, recommendations, and the conclusion.

[1] Idornigie P., Commercial Arbitration Law and Practice in Nigeria (LawLords Publication 2015), 1

[2] Ajogwu F., Commercial Arbitration in Nigeria Law & Practice (3rd edn Thomson Reuters 2019), 1

[3] Weiss J. A., ‘The Elements of Law’ [1985] (10)(2) Thurgood Marshall Law Review; 407

[4] Ibid n.2

[5] Arbitration Resolution Services, ‘8 Reasons to Choose ADR over Litigation to Resolve Your Dispute’ <https:// www.arbresolutions.com/8-reasons-choose-adr-litigation-resolve-dispute/> accessed 15 August 2021

[6] Ajogwu F., Commercial Arbitration in Nigeria Law & Practice (3rd edn Thomson Reuters 2019), 1

[7] Order 25 of the High Court of Lagos State Civil Procedure Rules of 2004 introduced Pre-trial Conference to explore a mediated settlement of the parties’ disputes.

[8] CFRN, 1999

[9] Bureau of Justice Statistics, ‘The Justice System’ < https://bjs.ojp.gov/justice-system> accessed 15 August 2021

[10] Acland A., Resolving Disputes Without Going to Court, (London: Century Ltd, 1995), 1

[11] ibid

[12] Moses L.M., The Principles and Practices of International Arbitration (2nd edn Cambridge University Press 2012)

[13] Okoye O. A., Law in Practice in Nigeria: Professional Responsibilities and Lawyering Skills (Snapp Press

Nig. Ltd 2011)

[14] Idornigie P., Commercial Arbitration Law and Practice in Nigeria (LawLords Publication 2015)

[15] Ajogwu F., Commercial Arbitration in Nigeria Law & Practice (3rd edn Thomson Reuters 2019)

[16] Stipanowich, T.J., ‘Arbitration: The New Litigation’ [2010] 2010(1) University of Illinois Law Review

<https://www.illinoislawreview.org/wp-content/ilr-content/articles/2010/1/Stipanowich.pdf> accessed 15 August 2021

[17] Akpata, P., The Arbitration Law in Focus (West African Book Publishers Ltd 1997)

[18] Olowu S., ‘Conflicts and Conflict Resolution’ [2001] (9)(3) IFE PsychologIA; 118-138

A CRITICAL INVESTIGATION OF ARBITRATION AS AN  ALTERNATIVE MEANS OF DISPUTE RESOLUTION IN  NIGERIA 

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