Definition: Arbitration is the submission of a disputed matter to an impartial person (the arbitrator) for decision.
The Process: Arbitration is typically an out-of-court method for resolving a dispute. The arbitrator controls the process, will listen to both sides and make a decision. Like a trial, only one side will prevail. Unlike a trial, appeal rights are limited.
In a more formal setting, the arbitrator will conduct a hearing where all of the parties present evidence through documents, exhibits and testimony. The parties may agree to, in some instances, establish their own procedure; or an administrating organization may provide procedures. There can be either one arbitrator or a panel of three arbitrators. An arbitration hearing is usually held in offices or other meeting rooms.
The result can be binding if all parties have previously agreed to be bound by the decision. In that case, the right to appeal the arbitrator’s decision is very limited. An arbitrator’s award can be reduced to judgment in a court and thus be enforceable. In nonbinding arbitration, a decision may become final if all parties agree to accept it or it may serve to help you evaluate the case and be a starting point for settlement talks.
How and When Arbitration Is Used: A common use of arbitration is in the area of labor disputes – between fire fighters and the city in wage disputes, for example. You will usually be represented by an attorney in arbitration.
Many contracts have clauses which require that disputes arising out of that contract be arbitrated. You may have seen such a provision when you applied for a credit card or opened a retirement account or other account with a stockbroker. You may want to explore using this process if you and the other side agree that the problem needs to have someone make a decision but you do not want the expense of going through the court process. If you agree to arbitrate or sign a contract with an arbitration clause, you should understand that the arbitrator may make the final decision and that you may be waiving your right to a trial in court.
Who Provides This Service: Many attorneys, other professionals or professional associations offer their services as arbitrators? Typically, your attorney will select the arbitrator based upon the particular type of the dispute. In complex and highly technical cases, often an arbitrator who is knowledgeable in that field is chosen. Usually fees are charged.
Some courts offer court-sponsored, nonbinding arbitration and have specific procedural rules to follow.
Characteristics of Arbitration:
- Can be used voluntarily
- Private (unless the limited court appeal is made)
- Maybe less formal and structured than going to court, depending on applicable arbitration rules
- Usually quicker and less expensive than going to court, depending on applicable arbitration rules
- Each party will have the opportunity to present evidence and make arguments
- May have a right to choose an arbitrator with specialized expertise
- A decision will be made by the arbitrator which may resolve the dispute and be final
- Arbitrator’s award can be enforced in a court
- If nonbinding, you still have the right to a trial
Litigation (Going To Court)
Definition: Litigation is the use of the courts and civil justice system to resolve legal controversies. Litigation can be used to compel opposing party to participate in the solution.
The Process: Litigation is begun by filing a lawsuit in a court. Specific rules of procedure, discovery and presentation of evidence must be followed. The attorney for the other side will want to take your deposition to learn more about the facts as you see them and your position in the case. There can be a number of court appearances by you and/or your lawyer. If the parties cannot agree how to settle the case, either the judge or a jury will decide the dispute for you through a trial.
A trial is a formal judicial proceeding allowing full examination and determination of all the issues between the parties with each side presenting its case to either a jury or a judge. The decision is made by applying the facts of the case to the applicable law. That verdict or decision can conclude the litigation process and be enforceable; however, if appropriate, the loser can appeal the decision to a higher court. In some cases, the losing party may have to pay the costs of the lawsuit and may have to pay the other party’s attorney fees.
How and When Litigation Is Used: Our American civil justice system is one of the best in the world. Our Constitution gives us the right to a fair trial. If you want your day in court with a judge or jury of your peers deciding the outcome, then the pursuit of litigation and trial of the case is for you.
You may be in a municipal court, state district court or a federal court depending on the type of dispute you have and where your attorney files your case or where you get sued. State court trial judges are elected on a nonpartisan ballot, though vacancies are filled through an appointment process from highly qualified applicants. The district courts also appoint special judges, who handle certain kinds of cases, such as small claims and divorces. These judges are selected by the district judges from qualified applicants. Federal district judges are nominated by the president and confirmed by the U.S. Senate. Federal magistrates are selected by the federal district judges. In all courts, cases are randomly assigned to the various judges. You have no choice concerning which judge will hear your case. Juries are randomly selected from a jury wheel of licensed drivers within each state judicial district and, in the case of federal court juries, from a jury wheel of registered voters and driver’s license holders.
If you cannot settle your differences through negotiation, mediation, arbitration or some other means, then you should pursue litigation through the courts with your lawyer.
Characteristics of Litigation:
- Involuntary – a defendant must participate (no choice)
- Formal and structured rules of evidence and procedure
- Each party could present its evidence and argument and cross-examine the other side – there are procedural safeguards
- Public – court proceedings and records are open
- The decision is based on the law
- The decision can be final and binding
- Right of appeal exists
- Losing party may pay costs
Other Dispute Resolution Procedures and Where You May Find Them:
- If you have a problem with a new car, you may find automobile arbitration through the Better Business Bureau to be a solution for you. The manufacturer of your car may also have a process of resolving disputes.
- If you are involved in agriculture and have a farmer-creditor controversy, the Agricultural Mediation Program may be helpful to you. For more information, visit www.ok.gov/mediation or call 800-248-5465.
- Victim-offender mediation which can result in restitution to the victim is available through the Oklahoma Department of Corrections.
- Other state and federal agencies sometimes offer settlement options in addition to their regular administrative procedures. For example, mediation of workers’ compensation claims is now available.
- If you do go to court, in addition to court-sponsored mediation or other ADR programs, you may find more procedures that encourage settlement or can resolve the dispute. Your attorney can tell you about the processes available in the court in which your case is pending.
- Appellate courts, such as our state Supreme Court and the federal Tenth Circuit Court of Appeals, have settlement conference opportunities.
- Do not forget Small Claims Court where a judge can decide your dispute – usually without a lawyer – if your claim is valued under $7,500. Early Settlement mediation is often available here to offer settlement assistance first so you may not need to go before the judge.
- Managing meetings and reaching consensus within any kind of organization or group can often be achieved through the assistance of a trained facilitator. Facilitators are available through various nonprofit support centers and service leagues or other community organizations.
- School Peer Mediation – Peaceful Resolutions for Oklahoma Schools (PROS), a project of the Oklahoma Bar Association/Law-related Education Department and Early Settlement, is training students to mediate their own disputes.
- Communication and conflict resolution skills classes may be available in your community by contacting the Law-related Education Department at the Oklahoma Bar Association thanks to a partnership with Leadership Oklahoma.
- The OBA Alternative Dispute Resolution Section may be a resource to identify additional options.
Selecting the Appropriate Method
The method you use to resolve your dispute will depend upon your personal needs and the nature of your particular dispute. You may want to consult with an attorney to help diagnose which process best serves your particular situation.
- Private and confidential or in a public court setting
- Informal setting and a more flexible process or one that is more formal and has specific rules to follow
- Personal control or decision made by a judge or arbitrator
- Maintaining relationships
- Dispute decided on questions of law, resolved with business principles or a solution found through other fair, yet practical, means
- Binding and easily enforceable
There will always be times when a courtroom trial is the best option. Often, however, you are better served by one of the other alternative dispute resolution processes described in this brochure. With a better understanding of the considerations that can help you choose the most appropriate method; your conflicts can be more successfully managed, and your disputes more satisfactorily resolved.
(Revised August 2015)
All Rights Reserved
Copyright ©2015 Oklahoma Bar Association
Dispute Resolution In Nigeria
Section 19 of the 1999 Nigerian Constitution for the first time in the history of constitution making in Nigeria provides for settlement of disputes by arbitration, conciliation, mediation and negotiation. This confers constitutional guarantee on settlement by arbitration and other forms of ADR.
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 enroll 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:
- When pleadings are deemed closed; the case shall be referred to Lagos multi-door courthouse or other appropriate ADR institutions or practitioner
- 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
- 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-
- State in general terms the grounds of the application
- 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-
- Duly authenticated original award or certified copy of the award
- 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, 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.
Except for 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 practiced. 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”.
INTRODUCTION TO DISPUTE RESOLUTION FRAMEWORK
i The structure of laws in Nigeria’s legal system
The Constitution of the Federal Republic of Nigeria, a decree promulgated in 1999 by the outgoing military government, is the foundation of the Nigerian legal system. The Constitution stipulates that any law inconsistent with it shall be null and void to the extent of such inconsistency. Thus, all other legislation in the land is subordinate to the provisions of the Constitution.2 All actions of the government in Nigeria are governed by the Constitution, and it is the Constitution, as the organic law of a country, that governs the rights, liberties, powers and responsibilities of the people (both the governed and the government).3
Next in the hierarchy is legislation made by the National Assembly for the whole of the territory of Nigeria, Nigeria being a federation, and within the Exclusive Legislative List, which sets out the legislative competence of the federal legislature.
State legislatures may pass laws for their respective states on matters that are not contained in the Exclusive Legislative List. They may also enact legislation in respect of matters that are contained in the Concurrent Legislative List, provided such enactments do not conflict with legislation enacted by the federal legislature.4
The customary laws of the various indigenous tribes within Nigeria are also recognized as part of the legal system, provided that they are not repugnant to natural justice, public policy or contrary to any written law.
Last in the hierarchy is common law, law created and refined by judges and inherited from Nigeria’s past as a British colony.
ii The structure of the courts and specialist tribunals
At the state level, there are two tiers of courts. The lower tier consists of magistrates’ and customary courts. Appeals from these courts go to the superior courts of record established for each state – the High Court, which is the upper tier. The lower courts are, for the present purposes, unimportant.
Appeals from High Court (federal or state) decisions lie with a federal court of appeal, and from there to the Federal Supreme Court, which is the final appellate court.
In addition, there are also special courts and tribunals such as the National Industrial Court, the Investment and Securities Tribunal5 and the Tax Appeal Tribunal.6 Appeals from the latter two lie with the High Court. The National Industrial Court began as an inferior court from which appeals went to the High Court. However, under a constitutional amendment that took effect on 4 March 2011, the National Industrial Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters relating to or connected with any labour, employment, trade unions, industrial relations and matters arising from the workplace, conditions of service, including health, safety, welfare of labour, employees, workers and matters incidental thereto or connected therewith. Appeal from the National Industrial Court before June 2017 lay with the Court of Appeal only on questions of fundamental rights as contained in Chapter IV of the Constitution of Nigeria. However, with a recent decision of the Supreme Court,7 all Appeals from the National Industrial Court can now be entertained by the Court of Appeal, and this jurisdiction is not limited only to fundamental rights matters. The jurisdiction of all the High Courts is set out in the Constitution, with the Federal High Court possessing exclusive jurisdiction in certain areas such as admiralty, aviation, taxation, revenue, trademarks, patent rights and corporate matters. State High Courts have unlimited jurisdiction over all other matters where the Federal High Court does not have exclusive jurisdiction. In Lagos State, the High Court is divided into five geographical judicial divisions, and into six subdivisions according to subject matter. There is no maximum number of judges in the High Court, and there are presently 56 judges in the Lagos State High Court.
Appeals may be made from the High Courts, as a matter of right, of final decisions. Appeals may also be made of interlocutory decisions, as a matter of right, if the grounds of appeal are grounds of law alone. Appeals in other instances may be pursued with leave, obtained from the High Court or from the Court of Appeal. Further appeals from the Court of Appeal to the Supreme Court may be made where the grounds of appeal are grounds of law alone. In all other circumstances, appeals require the leave of the lower court. Where leave is denied, a further application for leave to appeal may be made to the appellate court.
iii The framework for alternative dispute resolution (ADR) procedures
The framework governing ADR in Nigeria includes statute, case law, customary law and general principles of law. Nigeria has ratified and enacted into law the New York Convention8 and the ICSID Convention.9 Nigeria’s Arbitration and Conciliation Act (ACA)10 is modelled on the UNCITRAL Model Law on arbitration. Lagos State is the only state in the federation that has enacted its own arbitration statute.11 Nigeria is also a member of the World Trade Organization, which also provides for the settlement of disputes between states.
ALTERNATIVES TO LITIGATION
Arbitration in Nigeria is primarily governed by the Arbitration and Conciliation Decree,59 which is a federal statute. However, in 2009, the Lagos State House of Assembly enacted an Arbitration Law, in force in Lagos State, providing a different statutory framework for the conduct of arbitration in Lagos State. The constitutional basis upon which the Lagos State House of Assembly enacted the legislation is that the subject of the legislation – commercial contracts – is a residual matter,60 not being contained in the legislative lists in the second schedule to the Constitution.
The major local arbitral institutions are the Lagos Court of Arbitration, the Nigerian Branch of the Chartered Institute of Arbitrators and the Lagos Regional Centre for International Commercial Arbitration. The Lagos Court of Arbitration was created by the Lagos State legislature in 2009 to promote arbitration and ADR within Lagos State, and to make rules for arbitration conducted under the Lagos State Arbitration Law. The main international institutions involved in Nigeria-related disputes include the Permanent Court of Arbitration, the International Centre for Settlement of Investment Disputes, the Court of Arbitration of the International Chamber of Commerce, the London Court of International Arbitration, and the WIPO Arbitration and Mediation Centre.
Arbitration is increasingly accepted by both the legal and business communities in Nigeria as an alternative to litigation. Furthermore, it has become common for investors to always insist on inserting arbitration clauses into commercial agreements; this is to avoid resorting to litigation in the event of a dispute and is considered expedient as it is flexible and faster; parties can choose their venue and the applicable laws and appoint their arbitrators, and privacy and confidentiality is also guaranteed.
There is no right of appeal available to a party under either the Arbitration and Conciliation Act or the Lagos State Arbitration Law. An award may only be set aside for reasons of misconduct or other procedural irregularity by the courts.61
The options viable for the enforcement of foreign awards are laid down in Section 51 of the Arbitration and Conciliation Act.
The application for the enforcement of a foreign award is made ex parte supported by an affidavit with, inter alia, a duly authenticated original award or duly certified copy thereof, an original arbitration agreement or duly certified copy thereof and, where the award is not made in English, a duly certified translation.
The New York Convention applies to arbitration in Nigeria. The Arbitration and Conciliation Act incorporates the New York Convention of 1958, which is particularly set out as the Second Schedule to the Act.62
Recent decisions from the Federal High Court sitting in Abuja have raised issues about the types of cases that are arbitrable in domestic arbitration in Nigeria.63 Certain commentators appear to have taken the view that Nigerian courts have improperly intervened in international arbitration, though we do not believe this is the case.64
In this jurisdiction, mediation is generally governed by the agreement of the parties to a contract. The rules governing mediation may be established by the parties involved in a dispute or by incorporating rules of some mediation and conciliation organization, such as the Optional Conciliation Rules of the International Chamber of Commerce or the Conciliation Rules of the American Arbitration Association.
The statutory provisions governing mediation include the Arbitration and Conciliation Act, the Lagos State Multi-Door Courthouse Laws of Lagos State, 2007.
In Lagos State, the Practice Direction of the Lagos Multi-Door Court House (the ADR Centre), states that, on referral to any of the ADR methods, the ADR sessions shall be administered in accordance with the Negotiation and Conflict Management Group (NCMG) Mediation Procedure Rules 2002 or the NCMG Arbitration Procedure Rules 2002.65
Other forms of ADR are provided for by the Multi-Door Court House. The Multi-Door Court House is an ADR centre annexed to the court that offers a variety of ADR processes. It was established to supplement available resources for easy access to justice. The options available at the Multi-Door Court House include, but are not limited to, the following: early neutral evaluation, conciliation and negotiation.
III COURT PROCEDURE
i Overview of court procedure
Many states12 in the federation have reviewed the civil procedure rules applicable in their High Courts along the lines of the review carried out by Lagos State13 in the High Court of Lagos State (Civil Procedure) Rules 2004. As indicated above, Lagos State has published new civil procedure rules for the High Court of Lagos State, which took effect on 1 January 2013. Specifically, the most recently introduced rules all aim to discourage frivolous litigation and expedite dispute resolution by means of several novel provisions. The new Lagos Rules are used as a reference below.
Below is a summary of steps to be taken in a civil action commenced in the Lagos State High Court:
- a the claimant prepares a statement of claim together with a list of documentary evidence, a list of witnesses and sworn written statements;
- b the defendant files and serves a statement of defense together with a list of documentary evidence, list of witnesses and sworn written statements within 42 days after service of the statement of claim.
- c the claimant serves a reply to the statement of defense (optional) within 14 days.
- d after issues have been joined and pleadings have been settled, there is a pretrial conference, where the issues are narrowed down, admissions are made and judgment is given on the basis of admissions, discoveries and interrogatories, and relevant documents are exchanged;
- e after the pretrial conference, the case is set down for trial.
- f the trial takes place within one to 12 months after the pretrial conference, depending on the number of witnesses, the length of the documents to be tendered and the schedule of the court.
- g at the conclusion of the trial, the court must give its judgment within a maximum period of 90 days: and
- h unsuccessful parties may appeal to the Court of Appeal within three months of a final judgment and 14 days of an interlocutory decision.
Parties may file motions at any time during the course of litigation, although the pretrial procedure is designed to ensure that motions are disposed of in advance of a case proceeding to trial.
ii Procedures and time frames
The Lagos State Chief Judge has, pursuant to the Lagos Rules, issued practice directions for a fast-track procedure. Cases assigned to the fast-track route are to be concluded within eight months from their commencement, and for a case to qualify for the fast-track procedure it must be for a claim (or counterclaim) of a minimum of 100 million naira; involve at least one party who is a non-resident investor in Nigeria; or involve a mortgage transaction.14 All the procedures provided for in the fast-track program stipulate time frames shorter than those provided for in regular proceedings. For example, the pretrial conference period is limited to just 30 days, when for the regular procedure it lasts three months,15 and final judgment is to be delivered within 60 days of closing addresses, whereas for regular procedures it is 90 days. Although the application of these new rules has resulted in speedier resolution of applicable rules, the targets set by the rules are not being met by the courts.
All court rules provide for the bringing of urgent applications, which may be brought without notice (ex parte) against the adversary in appropriate circumstances, and the seeking of interim preservative orders to last until the determination of a subsequent similar application notified to the adversary.16 Where a party apprehends an occurrence that may irreparably damage his or her interests, the rules require him or her to bring his or her application (setting out his or her interests and the dangers apprehended in an accompanying affidavit) without delay to ensure an expedited hearing.
Conversely, to discourage parties that obtain an interim restraining order from employing time-wasting tactics to prolong the order, the rules also stipulate the length of an ex parte order to be seven days17 subject to extension by another seven days on application or after hearing.18
The most notable innovation of the new court rules is the requirement for a party to attach to his or her originating processes all documentary evidence and statements of witnesses to establish a claim or defence.19 This enables the adversary to have a fair picture of the claim and the evidence by which it would be proved. It also enables the court to assess the strength or otherwise of the claim. The court could then direct that the parties explore the possibilities of arbitration by referring them to the arbitration or mediation arm of the court, where the compromise effort could be professionally directed. In addition, filing charges for new cases are assessed at a percentage of the sum being claimed, and this new practice has made it more expensive for plaintiffs to file actions. The aim is to deter all but the most serious litigants.
Another novel provision of the new rules is the requirement of filing written briefs of argument in respect of motions and responses thereto20 with a stipulated time frame for all filings, failing which, penalty payments would become due for each day of default.21
The final noteworthy innovation of the new rules for treatment here is with regard to the treatment of costs. Previously, Nigerian courts rarely, if ever, awarded costs remotely related to the expenditure incurred by a successful litigant. Costs awarded were, in the main, merely nominal and of little value. Indeed, appellate courts continue to award what are, essentially, nominal costs. In many High Courts now, the previous policy has been reversed by the introduction of the new rules.22
In addition, another objective of the new rules is to expedite the delivery of justice.
iii Class action procedures
In Nigeria, it is possible for a limited number of claimants to institute and prosecute actions for themselves and for persons with similar interests. However, individual claimants must establish their own loss or damage. As a result, class actions of the type frequently seen in the United States, for example, are extremely rare in Nigeria.
iv Representation in proceedings
Citizens’ rights to represent themselves in proceedings before a court are contained in the Constitution as part of the right to fair hearing.23 This provision permits all natural persons to prosecute their cases or defend cases against them without counsel if they so choose. Where a person cannot afford litigation (for civil and criminal proceedings), legal aid is made available in Nigeria. The Legal Aid Act provides for a Civil Litigation Service to assist indigent persons to defend and enforce any right or privilege to which that person is ordinarily entitled under the Nigerian legal system. It also provides for a Criminal Defense Service to assist indigent persons involved in criminal investigation or proceedings with advice, assistance and representation.24 Lagos State has also established an Office of Public Defender, and the statute makes provision for legal aid to be provided in civil cases.
The question as to the possibility of a non-natural person appearing in court to handle proceedings was settled by the Supreme Court in Mode (Nig) Ltd v. UBA Plc.25 In that case, the appellant company’s director sought to argue the appeal on behalf of the company as the company was unable to afford counsel. The Court ruled that a litigant may appear in person, but a company is not in the same position as a natural person and thus could not be represented by its director or officer and only by counsel, as the rules of court do not contemplate that a company can sue or appear in person.
v Service out of the jurisdiction
The various rules of courts in Nigeria contain similar provisions for service of process on parties outside their primary jurisdictions.26 The State High Court’s jurisdiction is limited to the physical territory of that state, but the Federal High Court has nationwide jurisdiction, so outside jurisdiction for it is outside Nigeria.27 However, the rules ordinarily provide that service on natural persons shall be personal; that is, the delivery of process physically on the defendant,28 and for non-natural persons by delivering same on specified categories of principal officers at designated addresses of such entities.29 However, regarding service out of the jurisdiction, the rules make no distinction between the mode of service on natural and non-natural defendants, but it is widely accepted that the modes of service stipulated in Rules 6 and 8 would apply, and in the event of failure of such service the court could order substituted service upon application by the plaintiff.
As an example, the provisions of Order 8 of the High Court of Lagos State (Civil Procedure) Rules 2012 have laid down the procedure for the service of process on both natural and unnatural persons outside the jurisdiction.30
Under the Lagos Rules, a judge may permit service of process out of Nigeria where the entire claim relates to land situated within the jurisdiction (Lagos State); or where the suit calls for the construction of an instrument affecting land or hereditament31 situated within the jurisdiction; or if the relief sought is against any person domiciled or resident within the jurisdiction; or if the claim is for the administration of the estate of a deceased person who was ordinarily resident within the jurisdiction at the time of death; or the claim is brought to enforce a contract against a defendant resident within jurisdiction, or if said contract was made within or by an agent within the jurisdiction, etc.32
Furthermore, where parties have by their contract prescribed the mode or place of service, or the person that may serve or the person who may be served, the court will enforce the same.33
For originating processes, the rules require service by court bailiffs or other accredited process servers.34 Parties are expected to be served personally except where this has proved impossible, whereupon the plaintiff could apply for substituted service as discussed above. However, where a party has instructed counsel that has entered appearance to the action, processes meant for service out of the jurisdiction could be properly served on counsel.
The rules apply to natural and legal persons.
vi Enforcement of foreign judgments
Judgments of courts outside Nigeria are enforceable in Nigeria, but this is regulated by two statutes – the Reciprocal Enforcement of Judgments Act of 1958 (the 1922 Ordinance) and the Foreign Judgments (Reciprocal Enforcement) Act of 1960 (the 1960 Act). The applicability of both statutes to foreign judgment enforcement is another issue entirely. Decisions of the Supreme Court have indicated that the 1922 Ordinance regulates only judgments of courts from the ‘United Kingdom and other parts of Her Majesty’s Dominions and Territories under Her Majesty’s protection’,35 while the 1960 Act regulates the enforcement of judgments from all other countries that extend reciprocity to judgments of Nigerian courts if so proclaimed by the Federal Minister of Justice.36 The Supreme Court, however, has held this part of the 1990 Act still to be inoperative because the Minister of Justice is yet to make the proclamation required for its commencement.37 Therefore, court judgments from the United Kingdom, Her Majesty’s former dominions and protected territories and Commonwealth countries can currently be registered and enforced in Nigeria under the 1922 Ordinance. Judgments from other countries are only enforceable within 12 months of their delivery (or such a longer period as may be granted by the court) under Section 10(a) of the 1960 Act by virtue of statute until the Minister of Justice makes the necessary declaration. Such judgments may, however, be enforceable under common law by an action in court.38
vii Assistance to foreign courts
The circumstances in which courts in Nigeria may render assistance to foreign courts are set out in the rules of the High Courts. These provisions occur with little or no variation in the rules of the various state courts. Furthermore, the Federal High Court rules also contain similar provisions regarding when a court in Nigeria may render assistance to a foreign court.39
Most often, the kind of assistance courts in Nigeria render to foreign courts is limited to granting leave to effect the service of foreign process on a resident within the jurisdiction of the court.40 A letter of request is required from the court or tribunal for service on any person who is to be directed to the Attorney General of the Federation to effect service. Two copies of the processes or citation must be served. On payment of the approved amount, the process or citation shall be served on the person unless otherwise directed by the judge.41
viii Access to court files
Generally, Section 36(3) of the Constitution of the Federal Republic of Nigeria, the rules of court and other enactments expressly make it mandatory for proceedings of court to be held in public.42 Members of the public have unfettered access to attend and observe any ongoing court proceedings. This right of access does not, however, give members of the public an automatic right to obtain information in relation to court proceedings. A citizen desiring information regarding specific proceedings must comply with the prescribed application process.
However, there are qualified exceptions to this constitutional provision, one of which is Section 36(4),43 which states:
Provided that –
A court or such a tribunal may exclude from its proceedings person other than the parties thereto or their legal practitioners in the interest of defense, public safety, public order, public morality, the welfare of persons who have not attained the age of eighteen years, the protection of the private lives of the parties or to such extent as it may consider necessary by reason of special circumstances in which publicity would be contrary to the interest of justice.
If, in any proceedings before a court or such a tribunal, a minister of the federal government or a commissioner of the government of a state satisfies the court or tribunal that it would not be in the public interest for any matter heard in private to be disclosed, it shall take such other action as may be necessary or expedient to prevent the disclosure of the matter.
In cases where the proceedings are not restricted, an application for certified true copies of evidence is approved by a judge in chambers and, more often than not, the applicant making the request may be required to state his or her interest in the matter before request for pleadings or evidence is granted.
After the grant of the approval, a statutory fee, usually assessed by the registrar, is paid before the eventual collection of same. In addition, the passage of the Freedom of Information Act, No. 4, 2011, has made public records and information more freely available to the public. Under this Act, a person has the right to access or request information, whether or not in any written form, that is in the custody or possession of any public official, agency or institution howsoever described. An applicant need not demonstrate any specific interest in the information being applied for.
Public access to case files of concluded proceedings
The position is slightly similar to the one stated above. An application is usually made to the chief registrar of the court stating the request and if possible the reasons for it. Where the applicant is a party in the proceedings, the approval for information is usually given as a matter of course except if there are cogent reasons for its refusal. After the approval in both cases, statutory fees, usually assessed by the registrar, are paid before a certified true copy of the information is obtained.
ix Litigation funding
Nigeria, as a former British colony, operates a common law system, under which maintenance, ‘the procurement, by direct or indirect financial assistance, of another person to institute, or carry on or defend civil proceedings without lawful justification’ and champerty, an aggravated form of maintenance, in which the maintainer received ‘a share of the proceeds of the action or suit or other contentious proceedings’ were prohibited. In the general context, however, it was not certain whether Nigerian courts would continue to recognize these ancient prohibitions. However, within the Nigerian legal profession, both champerty and maintenance were expressly prohibited under the rules of professional conduct, until 2007, when new rules were introduced.
The removal of this prohibition went unnoticed for several years. The increased interest in litigation funding in other jurisdictions, has resulted in renewed scrutiny of this area in Nigeria. While there do not appear to have been any instances where litigation funding has been considered by Nigerian courts, it seems to be clear that there are no restrictions in Nigeria as to third-party funding of litigation.
IV LEGAL PRACTICE
Lawyers’ fees can be categorised into two areas. The first is the fees to be earned as an advocate, and the second the fees to be earned as a solicitor. The fees earned as a litigator are unregulated. These fees are essentially determined by negotiation between the client and the litigator.
With regard to work done for basic non-contentious or advisory work, the fee is also a matter for agreement between the solicitor and the client, but in assessing the fee, the solicitor would ordinarily be expected to take into account such factors as the subject matter of the dispute, the amount of time spent and the experience or age of the counsel involved.
The Legal Practitioners (Remuneration for Legal Documentation and other Land Matters) Order 1991 regulates the remuneration of legal practitioners in the preparation of legal documentations and other land matters.44 These fees are fixed and non-negotiable.45 However, instances where the scale is not applied are frequent, and these pass with little, if any, attempt to prevent the practice.
Regarding fees charged for probate matters, lawyers have developed the practice of charging a fixed percentage of the total amount of the estate, usually 10 per cent.
A conditional fee arrangement is permissible depending on the agreement between the parties and provided it is not champerties, which would make it void and unenforceable.46
The emerging trend in line with the practice in other jurisdictions in this area relates to the usage of a predetermined hourly rate as the basis of the calculation of fees.
i Conflicts of interest and Chinese walls
The practice of establishing Chinese walls is a possible departure from the long-standing rule against one lawyer acting for both sides in a dispute.47
Information barriers that are common in jurisdictions where large firms are the norm and the separation is more easily enforced are less likely to be needed in Nigeria, where the firms, if partnerships, are small and are mostly single-proprietor firms. This is an area in which Nigeria awaits future developments, as law firms grow in size and sophistication.
ii Lawyers’ responsibilities in relation to money laundering, proceeds of crime and terrorism
The Rules of Professional Conduct (2007) regulate the ethical conducts of lawyers in Nigeria. They make provision for the duties of lawyers towards judges, co-lawyers and their clients.
Rule 15(2)(a) specifically provides that a lawyer, in representing a client, must keep strictly within the law notwithstanding any contrary instruction by the client and, if the client insists on a breach of the law, the lawyer shall withdraw his or her service. The lawyer is also under the obligation to endeavor to restrain and prevent the client from committing the breach of law.48
A lawyer also has the obligation to reveal any illegal or fraudulent act of his or her client, except when the information is a privileged communication.
iii Data protection
There is presently no precise or detailed data privacy or protection law in Nigeria. The only legislation that provides for the protection of privacy is the Constitution of the Federal Republic of Nigeria (the Constitution).49 Section 37 of the Constitution provides that: ‘The privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected’. Other than this general protection given by the Constitution, there is no comprehensive law on data protection. However, there are a few industry-specific laws and regulations that provide some privacy-related protections, which include the Freedom of Information Act, 2011 (the FOI Act),50 the Child Rights Act 2003,51 the Consumer Code of Practice Regulations 2007 (the NCC Regulations), the National Information Technology Development Agency Guidelines on Data Protection (the NITDA Guidelines) made pursuant to the NITDA Act 2007, The National Identity Management Commission Act (the NIMC Act).52
V DOCUMENTS AND THE PROTECTION OF PRIVILEGE
Nigeria’s legal system, being based on English principles of common law and equity, also recognizes the common law principles regarding privilege, which involve some advantages, special rights, exemptions or immunity enjoyed by an individual or class of persons as opposed to a right enjoyed by all.53 In Nigeria, however, certain types of privilege receive statutory protection, having been enacted into Nigeria’s Evidence Act.54 In Nigeria, privilege attaches only as provided for in the Evidence Ordinance. Thus, no privilege attaches to communication between priest and penitent or doctor and patient, spousal communications where couples were not married under the statute, Islamic law and common law. Under common law, a solicitor may not disclose the contents or the condition of any document that he or she has become acquainted with in the course of and for the purpose of such employment. The privilege is that of the client and not of the legal practitioner and, as such, can only be waived by the client. The right of confidentiality guaranteed by Section 170(1) of the Evidence Act is absolute, as the courts cannot compel counsel to disclose information given to them by a client in confidence.55
The protections conferred by privilege attach to the individuals and class of persons named in the statutory provisions conferring the privileges. Principally it protects a witness from giving evidence relevant to an issue before the court. Persons not protected by privilege cannot avail themselves of it.
An individual from whom privileged information is ordered by a regulatory agency may only seek judicial intervention to prevent being made to hand over the required information.
Foreign lawyers would be bound from violating privilege if they are to be witnesses in proceedings conducted in accordance with Nigerian law under which the protections conferred by the Evidence Act would be given effect.
ii Production of documents
The only documentary evidence admissible in Nigerian courts is evidence relevant to prove facts in issue. Relevance is the foundation of admissibility in this jurisdiction,56 and if the court finds a document to be irrelevant to the determination of the issues in dispute then such a document would be rejected and so marked.
Relevance of evidence for the purpose of admissibility in proceedings occurs in varying degrees, thus some relevant facts may not be receivable in evidence or admissible because the court finds them to be remotely relevant.57 Furthermore, the relevance of some documents does not automatically make that document receivable in evidence; it only becomes admissible when it passes the tests of admissibility prescribed by the evidence ordinance (for example, if it is a copy of a public document). It only becomes admissible if it is shown that it is properly issued from proper custody or if proper foundation was laid for its admissibility.58
Subject to the proper foundation being laid regarding the production of documents stored electronically overseas, copies would be receivable in evidence in proceedings in Nigeria if they are private documents. Copies of public documents similarly stored overseas would also be admissible if shown to have been issued from proper custody. Only copies of said documents need be produced in court to be received in evidence. The rule of evidence in Nigeria has not been reformed to permit documentary evidence in Nigeria by electronic means.
Regardless of who has custody of the originals of a document, copies would be received in evidence if the party intending to rely on them shows them to be relevant and lays proper foundation for their admissibility. There is no requirement to produce all documents held by subsidiary or parent companies, but if they are relevant and proper foundation is laid, they would be admissible. The production of documents held by third-party advisers is subject to the provisions regarding privilege in the Evidence Act. To enjoy privilege, third-party advisers must be legal practitioners as the Act only protects attorney–client communication acquired or produced in the course of the relationship or employment. This privilege does not cover the client.
Electronically stored documents cannot be received in evidence in that state unless hard copies are made and the necessary foundation laid for their admissibility. A litigant may review electronic records for the purpose of litigation mainly under the rules of discovery where the facilities and the documents are under the control of the adversary or third party, where a document that may aid the litigant is in the electronic storage of the adversary and the adversary consents to the litigant’s access to such records. This scenario is optimistic, as practice shows that adversaries do not normally hand their opponents the information voluntarily. Rather, the natural reaction of the adversary would be to suppress records and seek to disclaim or discredit copies of said records produced by the litigant.
The rules of privilege also apply to in-house lawyers because they are bound by both the Evidence Act, various rules of court and case law. An in-house lawyer like any other lawyer cannot be compelled to give evidence or produce confidential information or exhibits of what transpired between himself or herself and a client.
The rules regarding privilege may apply to a foreign lawyer in the same manner it would apply to an in-house lawyer in Nigeria. Except where this does not comply with the privilege law in his or her country of origin, a foreign lawyer cannot be compelled to give evidence or documents containing confidential information shared with a client.
There has been no recent development in this area in Nigeria as the law still appears to be static in this regard.