Alternative Dispute Resolution in Nigeria: New Frontiers in Law

Alternative Dispute Resolution in Nigeria is not a new field.
Without doubt, disputes are invariable and recurring decimal in
human and commercial interactions. Thus, the need for effective
dispute resolution mechanisms to be adequately put in place arises.
Traditionally, Litigation and Alternative dispute resolution
mechanisms have been identified as the major means of resolving
disputes.

While Litigation, on one hand, involves recourse to a structured
court system which allows for adversarial discourse and analysis of
the dispute followed by a judgment which traditionally takes the
form of a win-lose situation, Alternative dispute resolution
includes a non-adversarial method of resolving disputes by
intercession and assistance of a neutral and impartial third
party.

As is obvious, litigation is generally fraught with a plethora
of irregularities, majorly time wastage. However, that is not the
crux of this discourse.

This paper aims to highlight the recent incursion of Alternative
dispute resolution into dispute resolution laws and address the
need for properly defined procedural frameworks.

Commercial disputes occur on a daily and hourly basis. The
Nigerian situation is however spectacular being a highly litigious
society. In Lagos State alone, over 30,000 new civil cases are
filed each year.

With the introduction of the various ADR Mechanisms, this ugly
trend has been reversed as parties can get a final determination of
their disputes within days and still maintain a cordial
relationship, a possibility which is alien to litigation.

Alternative Dispute Resolution in Nigeria: An
Overview
The success of Alternative Dispute Resolution in Nigeria cannot be
overestimated in the past few years. This success started in Lagos
and has been replicated across the country.

When the Lagos Multi-Door Courthouse (LMDC) opened in 2002, it
was Africa’s first court-connected Alternative Dispute Resolution
centre. Adapted from a concept first articulated by a Harvard law
professor, but embracing indigenous dispute resolution practices,
the LMDC was both innovative and rooted in Nigeria’s past. It
offered an appealing alternative to litigation. Cases are
consistently resolved more quickly, cheaply and amicably than those
heard in Nigeria’s congested courts.

By diversifying the dispute resolution options available to
Nigerians, the LMDC has eroded a long-standing national bias
towards litigation. Fourteen Nigerian states and the Federal
Capital Territory (Abuja) in October 2003 established its own
Multi-Door Court, have replicated the model showcasing the efficacy
of dispute resolution mechanisms that resonate with local culture
and practice.

Similarly, at the highest level of the judiciary, the Honorable
Chief Justice of the Federation, Honorable Justice Walter S. N.
Onnoghen, (has then was ) pledged to establish a dedicated
mediation centre at the Supreme Court in Abuja. This would ensure
that even parties in litigation at its most advanced stage can
resolve their disputes amicably while on-site.

In the same vein, the National Industrial Court of Nigeria which
is responsible for hearing employment disputes and grievances
brought by trade unions has established ADR centres at its
divisions in Abuja, Kano, Gombe, Enugu, Calabar and Ibadan.

All these have gone on to reveal the impact of Alternative
Dispute Resolution in Nigeria over the years.

Procedural Framework for Alternative Dispute Resolution
in Nigeria
In recent times, an ever-increasing plethora of laws, Acts, Rules
and Guidelines have begun to make viable provisions to aid and
enhance the adoption of ADR and also stipulate clear-cut procedures
to follow when ADR methods are adopted, especially in relation to
disputes which arise out of commercial interactions.

It is thus essential to highlight and examine some of the
various innovative provisions for ADR proceedings under the various
Rules of Court:

National Industrial Court of Nigeria Civil Procedure Rules
2017:
The National Industrial Court of Nigeria Civil Procedure Rules 2017
makes provisions for an “Alternative Dispute Resolution
Centre”.

Section 24 of the Rules provides thus:

(1). The President of the Court or a Judge of the Court may
refer for amicable settlement through Conciliation or Mediation any
matter filed in any of the Registries of the Court to the
Alternative Dispute Resolution Centre (hereinafter referred to as
the Centre) established within the Court premises pursuant to
Section 254C (3) of the 1999 Constitution (as amended by the Third
Alteration Act, 2010) and Article 4(5) (a)–(e) of the Instrument of
the Alternative Dispute Resolution Centre.

(3). The Centre shall endeavor to take all necessary steps to
conclude the Mediation or Conciliation process with respect to
matters referred to it within twenty-one (21) working days of the
date the process commences provided that an extension of ten (10)
working days may be granted by the President of the Court or a
Judge of the Court on request if the Mediation or Conciliation
process(s) is/are not completed within twenty-one (21) working
days.

(5). (1) Upon receipt of the report of an amicable settlement of
a matter from the Centre, the Court shall cause hearing notices to
be issued and served on the parties and their counsel, if any, for
the adoption of the settlement agreement as to the Judgment of the
Court.

(6). (1) Where parties to any mediation or conciliation process
are unable to settle their dispute amicably, the Director of the
Centre shall submit a report to that effect to the President of the
Court or the Judge of the Court who made the referral without the
record of the mediation or conciliation session(s).

Federal Capital Territory High Court Civil Procedure
Rules
One radical improvement made by the 2018 Abuja Rules is the
substantial provision for the procedural framework of ADR. In
contrast, under Order 17 of the 2004 Abuja Rules, there was only
little provision for ADR and it was discretionary and subject to
the consent of the parties. However, under the new 2018 Abuja
Rules, the scope of ADR is wider. Not only is the court or judge
now duty bound to encourage settlement of matters via ADR, but
there are also elaborate provisions for the procedural
framework.

Where a matter is suitable for ADR, the Judge shall by enrolment
order refer the case to the Abuja Multi-Door Court House (AMDC) for
resolution within 21 days except otherwise ordered by the court.
Where a party refuses to submit to ADR and loses the case in court,
he shall pay a penalty as may be determined by the court. The court
or judge shall, on the application of parties enrol the terms of
settlement both in heading and content reached at the Abuja
Multi-Door Court as consent judgment; such terms shall thereupon
have the same force and effect as a judgment of the court.

It should be noted that under the 2018 rules, an application to
enforce an award on an arbitration agreement or order may be made
ex-parte, but the court hearing the application may order it to be
made on notice.

•      High Court of Lagos State (Civil
  Procedure) Rules 2019;

The High Court of Lagos State (Civil Procedure) Rules 2019 lays
down a very comprehensive procedural structure of ADR in Lagos
State. Order 28 provides for Alternative Dispute Resolution (ADR)
proceedings and states thus:

1. When pleadings are deemed closed; the case shall be referred to
   Lagos multi-door courthouse or other appropriate ADR institutions
   or practitioner
2. Upon the directive of the judge in sub-rule (2) of this rule,
   the claimant shall, within fourteen (14) days file his statement of
   case and the defendant shall file his response within 14days
   of service of the statement of claim
3. Any judgment given under rule (3) above may be set aside upon
   an application made within 7 days of the judgment or such other
   period as may be allowed by the ADR judge.

         Mode Of Alternative Dispute
Resolution  Application

• An application in any ADR proceedings under these rules shall
  be by originating motion on notice.
• The originating motion, as provided under this order
  shall-

1. State in general terms the grounds of the application
2. Where the motion is founded on evidence by affidavit, it shall
   be accompanied by a copy of the affidavit was intended to be used;
   and be supported by a written address.

• A party applying for enforcement of an award shall supply
  the-

1. Duly authenticated original award or certified copy of the
   award
2. Original arbitration agreement or a duly certified copy of
   same.

An application to set aside or remit any award may be brought at
any time within three months after such award has been made and
published to the parties; provided that a judge may by order before
or after the expiration of three months extend the time allowed by
the rule to set aside or remit an award.

Other Regulations and Guidelines Which Make Provisions for
ADR Proceedings

Apart from the above-listed Rules of Court, other bodies have
embraced ADR and have consistently promoted its use. One of such
bodies is the “Chartered Institute of Bankers of Nigeria” which has
promoted the use of ADR within financial disputes.

Also, the Central Bank of Nigeria (CBN) in encouraging the use
of ADR has established a sub-committee on Ethics and
Professionalism for Mortgage Bankers. The committee will ensure the
settlement of disputes between mortgage banks and their customers
on one hand and mortgage banks on the other.

The sub-committee which is a self-regulatory body is the
Alternative Dispute Resolution (ADR) Platform/Financial Ombudsman
for the mortgage banking sub-sector, has the Chartered Institute of
Bankers of Nigeria (CIBN) as the Secretariat. The body,
however, will not entertain cases that are more than six years
old in line with the Statute of Limitation Act.

Regulation for Direct Debit Scheme In Nigeria 2018
(Revised)

As it relates to disputes arising from the
direct debit scheme,^[1] The Act states that
“Any dispute, controversy or claim arising out of or relating to
this Regulation or the breach, termination or invalidity thereof
shall be settled in accordance with the CBN’s dispute resolution
mechanism and if unresolved, may be referred to an Arbitral panel,
as provided under the Arbitration and Conciliation Act Cap. A18 LFN
2004”.

Lagos State Mortgage Board Dispute Resolution

Some Lagosians already appear to recognize the potential of ADR.
Businesses have adopted ADR with zeal, offering additional means of
resolving disputes. Lagos now hosts several specialist centres some
of which have enacted bespoke Arbitration rules for adoption and
use by disputants. While others use the rules annexed to the
Nigerian Arbitration and Conciliation Act. Such centres are
increasingly targeting regional and international clients, as the
state judiciary does not refer cases to private providers.

A key example of the above is the Lagos State Mortgage Board. A
major component of the Lagos State Mortgage Board Scheme is the
dispute resolution mechanism between the Lagos State Mortgage Board
(LMB) and the HomeOwner.

The Scheme has an effective dispute resolution mechanism by
Arbitration through a single Arbitrator appointed by the President
of the Lagos Court of Arbitration (LCA).

The proceedings will be conducted under specially designed Lagos
HOMS Housing Arbitration Rules that are expressly incorporated in
all Lagos HOMS documentation.

Recommendations  for the Future Practice of Alternative
Dispute Resolution in Nigeria

Not minding the various improvement of ADR generally, there
still exist a number of hindrances to its full-scale adoption by
commercial disputants in Nigeria. One of such hindrances is the
lack of updated Legislation to regulate Arbitration and ADR
practices.

With the exception of the Lagos High Court Civil Procedure Rules
and the Federal Capital Territory, Abuja High Court Civil Procedure
Rules which came into force in 2019 and 2018 respectively, all
other major Legislations on Arbitration and ADR are old. For
instance, the Arbitration and Conciliation Act which is the most
important legislation on Arbitration was enacted as far back
as 1990 Thus, such a law can hardly reflect the current trends in
the society.

Another issue relates to the lack of adequate legislation to
cover other forms of ADR. From the title of the Arbitration and
Conciliation Act, it can be seen that the Act only makes relevant
provisions for merely Arbitration and Conciliation amongst the
plethora of ADR options which exists. There is, therefore, a need
for the Parliament to create a Legislation that would encompass all
relevant ADR forms.

Also, there is a need for Legislators to look beyond commercial
disputes for our Arbitration practice in Nigeria by considering a
legal framework to accommodate other forms of disputes to our
Arbitration system.

Finally, it has been discovered that our practice of Alternative
Dispute Resolution in Nigeria lacks a vibrant awareness mechanism,
which means that laypersons lack a proper understanding of how the
Arbitration system operates and how it is practised. Perhaps, it is
due to the fact that the 1999 Constitution (As Amended) doesn’t
specifically make provisions for the adoption of Arbitration as a
dispute resolution mechanism.

There is always room for further integration of Alternative
Dispute Resolution in Nigeria into the formal justice system
through recognition under the Nigerian Constitution or laws
clarifying their relationship with the State enforcement apparatus.
Such steps would increase disputants’ confidence in the process and
reassure them that participation in Alternative Dispute Resolution
is equivalent to having their “day in court”.

Written By: Victor Akazue
Nwakasi^[2]  (Partner, Corporate Commercial/ ADR)^[3] & Kikelomo
Lamidi (Associate)

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