ALTERNATIVE DISPUTE RESOLUTION

• Isochukwu
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• Civil Litigation

ALTERNATIVE DISPUTE RESOLUTION.

ADR refers to processes that offer an alternative to litigation. Dispute resolution other than by the formal court setting. Disputes arise in different dimensions and circumstances.

Rule 15(3) RPC 2007 now mandates lawyer to inform client of ADR Options before resorting to litigation. See also Or 3 Rule 11 HCLCPR 2012 which empowers registry to screen the cases for suitability to ADR with Lagos operating a multi-door courthouse.

FEATURES OF LITIGATION (THEN CONTRASTED WITH ADR).

• It is adversarial: where parties try to convince the judge to hold in their favour. This gives it a win-lose Unlike ADR where parties largely accommodate one another’s interest thereby reducing the chances of bitterness.
• Results in binding and enforceable decisions in form of judgment.
• Rigidity and Technicality: As the practice and procedure is highly regulated by acts, statutes, laws, court rules, practice directions and other enactments to ensure certainty. This inevitably gives rise to systematization and rigidity. This also makes it more time consuming than other modes as rules of court specify the time the court opens. In ADR, parties can choose their venue and use various modes of communication. But in litigation parties cannot by agreement confer jurisdiction. Court is bound by EA-Section 256(1) EA.
• Time Consuming: This technicality is coupled with the fact that the judiciary is inadequately staffed and funded. Parties in ADR are fee to modulate their discussions and venues.
• Publicity: Proceedings are publicly conducted in courts or tribunals set up by law. See Section 36(1) and (3) of the 1999 Constitution. Oviasu v Oviasu, Menakaya v Menakaya. Non-compliance may result in nullity-Oviasu v Oviasu (held in judge’s chambers). While ADR proceedings are private and at the convenience of the parties.
• State Controlled and Funded as their jurisdiction, qualification, appointment, remuneration, retirement, e,.t.c are being determined by Federal and State(s) laws.
• Coercive: since state controls the apparatus of coercion and parties choices are limited. They cannot choose venue, time, judge… moreover, service of court processes (like subpoena) generally creates a binding obligation to be present else contempt may be issued and proceeding may go on in defendant’s absence. This coercive power mutates into enforcement as there are laid down rules and procedures for the enforcement of a valid court judgment. See the Sheriffs and Civil Processes Act and the Judgment Enforcement Rules.
• Use of Lawyers: due to the intricacies involved in litigation. Unlike Litigation any other can represent a person in ADR.

Cases best suited for litigation.

• Criminal Cases. Section 36(5) 36(4) provides fair hearing… “by a court or tribunal”
• Interpretation of Laws. But arbitrators may apply a provision of law in settling dispute.
• Real emergency Situations requiring the grant of injunctions to protect res.
• Where the law mandates. E.g. Section 46(1) provides the that one should apply to the “High Court”. The Electoral Act also provides that questions on valid election shall be determined by the court or tribunal.
• To stop the limitation countdown and prevent action from being statute barred as ADR cannot stop time from running-SPDC v Ejebu.
• Litigation provides an avenue to keep out frivolous demands.
• Where precedent is sought to be created as litigation applies the principle of staire decisis which is maintained by the hierarchy of courts.

SHORTCOMINGS OF LITIGATION.

• The choice of the parties are limited.
• Lack of privacy.
• Cost intensive, rigid and time consuming.
• Win-lose approach often breeds enmity especially in underdeveloped countries-Jadesimi v Okotie-Eboh.

For Arbitration you could do breach of contract, matrimonial causes, tort, compensation for acquisition of land, etc.

 

ADR Mechanisms.

1. NEGOTIATION: To bargain or parley so as to reach a mutual agreement. It is regarded as the mother of dispute resolution mechanisms as every ADR mechanism has a feature of negotiation especially where the parties’ interests are not totally incompatible and such accord would provide mutual benefit. BATNA (Best Alternative To Negotiated Agreement) coined by Fisher, Ury and Paton. It is the best option that the party would walk away with if an agreement is not reached. i.e. best walk away alternative. (BATNA should be flexible, workable and accommodate other party’s interest). This would guide him in his negotiation. It is advisable to know your banta and possibly the other party’s banta therefore helping you set a reasonable bottom line.

WATNA is the Worst Alternative to Negotiated Agreement. The “Bottom Line” is a predetermined least concession he can make and if the other party does not agree, he would walk away. Worst cause of action.

Negotiation may fail for ineffective communication and poor convincing, stalemate, disagreement still persists.

Types of Negotiation: Domestic, commercial, international.

STAGES OF NEGOTIATION.

Depending on the author and his individual classification.

Preparation stage: during this stage, the negotiator and parties should know the parties and their dispositions, both sides interests and banta, your WATNA and bottomline. identify likely barriers and determine the strategy of negotiation to adopt, assess who the odds are in favour of (e.g. the other party has a higher bargaining power maybe laws uphold his right or he has a higher amount of information).

Opening Stage: the ground is set for each party to state his own side of the story noting his grievance, desires and interests. It usually better to allow the party with a stronger case/ a more belligerent disposition to start first. E.g. in labour disputes the workers. This enables weaker party to further strategize.

Bargaining Stage[1]: parties then parley and persuade with tension dissuading or escalating. Body language, disposition, mode and manner of expression should be carefully applied here. Parties then rethink their positions and communicate resolutions.

Closing/conclusion Stage: there is a brief recap of agreement and where parties accept, the agreement is fine-tuned, put in writing and properly documented.

Execution Stage: the written agreement is signed by the parties

NEGOTIATION STRATEGY may be positional/competitive (win/lose) or co-operative/problem-solving (win/win)[2].

Types of Negotiation tactics (depends on the strategy adopted) include: control of agenda, contextual manipulation, overwhelming numerical strength, puffs (misrepresenting batna), deadline (beyond which offer deemed rejected… puts pressure) threats (to call off negotiation and resort to litigation if demands are not met), take it or leave it, piecemeal/nibble (take the issues one by one), package deal (take the negotiation as a whole), leapfrogging (jumping from one point to another to hide weakness) nibble, limited authority, lack of authority, behavioural, psychological, (win-win, win-lose included?) flattery (soothe ego), humour (cracking joke to break deadlock) take it or leave it (hit and run), freeze out (making opponent feel ignorant and weaken his confidence (etc).

The 3 Types of Negotiation Styles are soft, hard and firm.

2. MEDIATION: here, parties invite a neutral third party to facilitate the resolution of a dispute. The Mediator should be essentially and manifestly impartial and empathic with good listening skills and ability to control tension thereby repressing parties’ aggressions and facilitating an amicable resolution. He needs to exercise his creative problem-solving skills here, be flexible and be able to build trust. Preparation Stage (place time of meeting and so on, allowance of mediator too, parties ask court for adjournment), Opening Stage (with Mediator introducing himself and the situation, noting ground rules, declaring confidentiality and gaining parties trust and assurance… assuring parties of confidentiality, impartiality, and building rapport), agenda/issue setting stage (exploration Stage): here the real issues are discovered by the parties and negotiator. Negotiation Stage: then the parties bargain. Conclusion Stage: Mediator reads out solutions and areas of agreement to parties and if satisfied, they consent and sign settlement agreement and the agreement becomes binding and no party can resile from it. if parties do not agree, mediator thanks them for their time and closes.

Ediation is advantageous as a th ird party makes it faster and makes parties more committed, win-win, expertise and mediator stands as witness to agreement reached by the parties. Disadvantageous in payment of mediator, parties may not be at ease to disclose to third party especially where they lack trust in mediator, where issue is complex and outside mediator’s expertise the activity may amount to a waste of time. Mediation is less formal and less expensive than arbitration but less binding decision as no it has no statutory backing, arbitrators must reach an award while in mediation, parties need not reach an agreement.

More control by parties over negotiation than arbitration

mediation is also termed case evaluation or facilitated negotiation.

Mediation may fail due to ineptitude of mediator in listening, communicating, impartiality and finding out real interests of the parties. Also where parties are unwilling, un-submissive, impatient, e.t.c. The Mediator merely helps the parties work out their own solution.

Mediation may fail due to ineptitude of mediator in listening, communicating, impartiality and finding out real interests of the parties. Also where parties are unwilling, un-submissive, impatient, e.t.c.

3. ARBITRATION: Section 5 Arbitration and Conciliation Act, Collins v Collins. It is a private and judicial determination of a dispute by an independent third party. May be Domestic (domestic Law), International (International Law), Institutional (dispute resolution carried out by the rules of a particular arbitration institution or agency) or Ad hoc (where no rule is selected, parties usually choose).

Stages:

– initiating arbitration: one party gives written notice[3] (ARB is deemed to commence on day notice or request is received by other party.

– Appointment of Arbitrators;

– Preliminary Meeting: of arbitrators and parties to set modulations (in accordance with fair hearing).

– Submision of points (statement of claim) and defence in response. Accompanied with copy of contract and arbitration agreement, all other relevant documents, written statement of evidence of witnesses may also be filed… at least 15 days to the hearing.

– Hearing: with notice of date time and place of hearing given to parties. Procedure be determined by the parties or arbitral tribunal. May follow the provisions of EA provided no miscarriage of justice. where a party fails to file processes after notification, arbitral tribumnal may still proceed except defaulting party can show good cause why default should not be treated as admission. Arbitrators then give a date for announcement of the award. Case may be reopened for a party where justice demands. Proceedings may also be terminated where parties consent, claimant withdraws or tribunal discovers that it is unnecessary to continue.

– Award: i.e. the decision of the AT which should be written, contain names of the parties, signed by arbitrators (or majority of arbitrators). Parties be given copies and award may be made public where parties agree. After service of award on parties, the arbitration proceeding is said to have terminated. Clerical/typographical errors may be corrected.

Section 1 ACA provides that every arbitration agreement should be in writing. Parties decide the procedure to adopt else provisions of ACA applies being default provisions. Article 3 Arb Rules notes that Arbitral proceedings is deemed to commence once claimant serves notice in that regard demanding dispute be referred to arbitration, names and addresses of parties, nature of claim, amount involved nad remedy sought. The Arbitrator works out a solution for the parties and what he decides is binding on the parties. In arbitral proceedings, witnesses can be called, evidence can be taken, cross-examination and representation by counsel. At the end, an “award” is given.

Arbitration has been criticised for being a mirror of litigation. Note the difference between Arbitration and Litigation. (just look at the distinction earlier between ADR and Litigation with necessary modifications). Note Section 30 ACA for appointment and removal of arbitrators.

At the end, the loosing party usually bears the cost. Award can be enforced upon application to court-Section 31, 32 ACA.

Technical mattes are better handled.

Arbitration also has a more binding feature. Arbitration clauses/agreements are independent from the underlying contract and may survive the contract. Furthermore they are irrevocable (Section 2 ACA) The vitiation of the underlying contract would not ipso facto terminate the arbitration agreement. BCC Tropical Nig. Ltd v Govt Yobe State. Then also Nig. NLNG Ltd v African Development Insurance Co. Ltd, Heyman v Darwin Ltd. Except where the contract is void ab initio or the dispute cannot be referred to arbitration.

Arbitration may be

– Customary; no ACA. i.e. must be conducted in accordance with customs and trade practice  provided partis voluntarily submit with intention that decision of arbitrators is final and the award is published-Okereke v Nwankwo.

– Domestic; – Institutional: CIArb, LMDC, AMDC under the auspices of the institution.; – International; subject to international conventions; -Ad hoc: rules are determined by the parties.

Arbitration may arise from – written arbitration clause (which is an independent contract which is not nullified by agreement or death of parties) revoked only by express written agreement of the parties. – Statutory requirement: that disputes be first arbitrated; – Post dispute agreement ot refer to arbitration; – Reference by the court (suo moto or on application of party(ies).

Arbitrators may be appointed by the parties or institution or court (where party neglects) Or (already appointed) arbitrators (can appoint a third). The mode of appointment may be stated by the parties failing which ACA governs which is the parties or 2 already appointed arbitrators appoint a third one after 30 days of party not appointing or court where partiy neglects for thirty days-Section 7 ACA[4].

A party may (in writing) challenge the appointment of an arbitrator (within 15 days from knowing of appointment/constitution of panel/irregularity) on the ground that he lacks the party-agreed qualifications or lacks impartiality or physically or mentally incapable or appointed arbitrator is causing unreasonable delay which could cause substantial injustice.

An arbitrator may be removed where he is successfully challenged, voluntarily withdraws, parties terminate his mandate, other instances that can ground his being challenged.

The number should be 3 or an odd number which the parties stipulate-Section 7 ACA.

Jurisdiction of arbitrators can be challenged (before he submits his points or statement of defence) where ; – they lack jurisdiction (MAdukolu v Nkemdilim (4 grounds for jurisdiction); – exceed their scope of authority, condition precedent not been fulfilled. Although it appears that sice it is a jurisdiction issue, he can still raise it notwithstanding participation in proceeding.

28 and 29 ACA-Award may be challenged (within 3 months from date of making the award[5]) on all earlier mentioned and; that arbitrator misconducted himself/was gratified/bribed, party is under some incapacity, the there is no arbitration agreement or it is invalid under the law parties chose to govern it, procedure and composition of tribunal improper (based on law or agreement of the parties). Finally; in lagos where award is contrary to public policy-55. Application supported by affidavit, CTC of Award, Copy of Arbitration agreement and Copy of Contract.

Court may set aside in whole or in part (the remainder being remitted to tribunal to try again).

The Award may be enforced by application to Hc by motion supported by affidavit. Accompanied with  CTC of Award, Original Copy of Arbitration Agreement (translated to English). Then becomes judgment of the court.

Court may refuse to enforce the award where it does not comply with form, incapacity of the parties, public policy, arbitration proceeding or arbitratoor’s appointment not intimated to the other party, award exceed scope, composition and appointment contrary to agreement of parties, statute bar, jurisdiction, agreement is not valid under the law where the award was made.

Arbitration only challenge the procedure or jurisdiction rather than appeal on merit of the case.

CONCILIATION: Part II ACA (especially 40-42). Settlement of dispute in an agreeable manner through independent third party called the conciliator. Usually where negotiation fails. Unlike mediation it is provided for by law. E.g. Under the Trade Disputes Act. More interventionist than mediation especially in disputes involving government agencies. Conciliation is deemed to have commenced on the date the conciliation request is accepted by the other party. Appoint one or three conciliators. Terms of settlement are drawn up and signed by the parties afterwhich it becomes binding or if TOS rejected, Conciliators suggest Arb or Lit.

EXPERT DETERMINATION: A neutral third party who is an expert in the field gives binding decisions on the issues in dispute.

MINI TRIAL: evaluation of the case to help parties better understand the case and know whether to enter negotiation. The panel is usually composed of senior managers who are in a position to take decision as regard the dispute.

EARLY NEUTRAL EVALUATION (ENE): here a neutral third party appraises the case and gives a non-binding opinion on the case or prediction on possible outcome of the case. This may trigger settlement offers.

RENT A JUDGE: United States. A private neutral party gives a non-binding decision on the case as though he were a judge.

MED-ARB: A hybrid where the neutral first acts as a mediator then an arbitrator.

 

Difference between Conciliation and Mediation.

Conciliation is regulated by law while mediation is not.

Conciliation agreements have more binding effect than mediation especially in lagos state.

In conciliation, it is the conciliator that draws up the terms of settlement which the parties may adopt if they agree… this is not the case in mediation.

MULTI DOOR COURT HOUSE.

An official assimilation of ADR mechanisms into the court system. i.e. court connected Lagos MDCH blazed the trail in2002[6] then AMDCH. Parities may choose to have their case mediated under the auspices of the centre[7] or judges can even refer cases to ADR where deserving[8]. It has been noted in cases that this practice is not new. See for example Mrs Angela Omolara Branco v Wemabod Estates Ltd 2011. Get the order of the court allowing this. Administration fees and other costs be paid.

Mediation may be initiated by written request or submission to mediation. The request should state the names, address and contact of the parties and nature of the dispute.

The centre may then appoint or parties pick from a list.

The parties then enter a mediation agreement in relation to the confidentiality and conduct of the arbitration.

There is the mediation exercise (issues are resolved and settlement agreement is drafted); – Execution of Settlement agreement. Parties or mediator may in writing declare that settlement is not possible.

For Arbitration under the Centre: look at previous discussion… the rules of the centre apply subject to variations by parties agreement. Initiated by filing written notice at the centre of intention to arbitrate stating the nature of dispute, amount involved, remedy sought and desired venue copy of contract, arbitration agreement, pay filing fees R 7.

REspoondent has 10 days to file his reply. Same appointment as earlier (30 days too).

Arbitral Tribunal should make its final award within one month from the conclusion of arbitration  or 3 months in exceptional circumstances. Award should state reasons, place, date, signed. Parties may ask the tribunal to make terms of settlement a consent award. ACA makes provisions for enforcement

Note lagos has its Arbitration Law 2009.

 

[1] Some authors add ice breaking stage (parties meet) and then agenda setting stage (parties agree on what the subject of negotiation is and issues are narrowed down.

[2] Disadvantage is where parties have nothing to lose if relationship is terminated. Both strategies should be mixed depending on the negotiation process.

[3] The notice should contain the names and addresses of the parties, reference to arbitration clause, contract, proposal as to number of arbitrators to be appointed (if parties had not previously agreed). This notice is referred to as “declaration of a dispute”.

[4] In lagos state, the party that has appointed would notify the other one to appoint or the on he appointed would be sole arbitrator if he does not appoint after 7 days. An umpire may be appointed by the parties who may take over from arbitrators if need be.

[5] Or 30 days from additional award-Vitamalt Plc v Ibrahim Abdullahi.

[6] By the Negotiation and Conflict Management Group in collaboration with the HC Lagos as a private public partnership. Then LMDC Law 2007gave LMDC a statutory backing

[7] Rule 20 AMDCH Mediation Procedure Rules 2003.

[8] Section 1 LMDC Law 2007. The objectives of LMDC is to enhance access to justice by providing ADRs, effective and quicker resolution of disputes and dispensation of justice, reduce workload of court and promote ADR in Lagos. Section 2 LMDCL 2007. Endorsement by an adr judge and due registeration of the agremment or memorandum can serve it as enforceable judgment of HC enforceable under SCPA-Section 4