In today’s business world, you are trying as much as possible to protect your own interests as a businessman. When those interests are not in line with that of your business partners or competitors, contract disputes may arise. The question of how to resolve these disputes then arises… Do you wish to resolve them as cost-effectively, timely, amicably and favorably as possible? These questions become your priorities as a business owner.
Generally, there are two major ways of resolving business disputes: The dispute resolution mechanism of the court which is litigation and the alternatives to those methods which may be in form of arbitration, conciliation, negotiation or mediation.
Either by default or coincidence, litigation became the popular means of resolving many disputes in Nigeria probably because of the advantage of finality and sanction. As the market became more advanced, businesses strived to maintain their relationships and resolve disputes as timely and less costly as possible; the result of this was a need to explore other means of settling their differences in a bid to avoid what can be best described as brinkmanship and acrimony.
According to Akpata, (JSC), he posits:
“It is not hazarding a guess, but being factual to say that the Anglo-saxons, the Romans and indeed every community that lived ‘under the sun’ in ancient times used arbitration or mediation or conciliation, in one form or another to, to resolve disputes.
The Alternative dispute resolution mechanisms have constitutional backing just like the powers conferred on the courts under Section 6 of the 1999 constitution. Specifically, Section 19(d) of the Constitution of the Federal Republic of Nigeria 1999 provides for the settlement of disputes by Arbitration, Mediation, Conciliation, Negotiation and Adjudication.
Similarly, Rule 15(3) (d) of The Rules of Professional conduct for legal Practitioners 2007 provides that a lawyer, in representing his client shall not fail or neglect to inform his client of the option of alternative dispute resolution mechanisms before resorting to or continuing litigation. The level of compliance to this provision however is a matter for another day. Do lawyers really advise their clients to pursue the alternative means as opposed to litigation?
The Arbitration and Conciliation Act, Cap. A18, Laws of the Federation of Nigeria 2004 equally provides in Part 1, Sections 1 to 36, Part II, Sections 37 to 42, Part III, Sections 43 to 55 and Part IV, Sections 56 to 58 the methods of applying ADR.
The Federal High Court Act, Cap. F12, LFN 2004 in Section 17 provides that “In any proceedings in the Court, the Court may promote reconciliation among the parties thereto and encourage and facilitate the amicable settlement thereof”.
Given the numerous advantages of the alternative dispute resolution mechanisms and the various statutory provisions that give life to them, the question then arises.. Should they really be alternatives? Or the preferred choice of resolving your disputes? I think not.
Alternative dispute resolution (ADR)
Most lawyers, business men and companies still view ADR as the alternative rather than the primary or preferred method of settling disputes. They see the procedure as a way of settling peripheral, less important disputes or only explore it when the court advises them to. They simply abandon it when they fail to get the result they want.
It has been shown that in organizations where a preference for ADR has taken hold, fresh approaches to conflict tend to be resolved almost on their own. An example is the Toyota Reversal Arbitration Board which is a nonbinding mechanism to settle disagreements with its dealers. At Toyota’s U.S. subsidiary, a Reversal Arbitration Board, set up to ease contention between the company and its dealers concerning allocation of cars and sales credits, has brought about a steady decline in the number of these court cases, from 178 cases in 1985 to 3 in 1992.
This, certainly has saved them time, money and helped to preserve business relationships with their dealers. Chevron has also adopted this procedure of talking alternative dispute resolution as top priority.
You can then ask yourself, what is Chevron and Toyota doing that other companies are not? The difference lies in the level of commitment. Companies that give ADR top priority are in fact reaping ADR’s predicted benefits: lower costs, expertise, quicker dispute resolutions, and outcomes that preserve and sometimes even improve business relationships.
What to do when you have disputes
In my view, the courts should not be the place where the resolution of disputes begins but rather where disputes end after alternative methods of resolving such disputes have failed. So the idea of consent judgment which arises after the court has assumed jurisdiction and thereafter allows parties to settle their differences outside the court, further wasting economic time, will have no role to play.
I am also of the view that an enabling legislation providing for compulsory ADR as a condition precedent to any other method of dispute resolution should be enacted. This was done in the State of Texas, U.S.A. with the enactment of the Alternative Dispute Resolution Act of 1987 and has been of immense benefits.
Although there are problems with Alternative dispute resolution in terms of sanction, finality and the lack of precedence. In spite of all the attendant problems associated with the practice, ADR still remains veritable tool for dispute resolution. The practice is vibrant and it has received growing patronage in recent times. Its pros by far outweigh its cons.
If its advantages are properly harnessed, it will decongest the perpetually congested cause lists in our courtrooms, dispense justice more quickly , prevent acrimony and maintain long lasting business relationships that will fast track growth, development, commerce and confidence in the Nigerian economy in the new world order.