We all know that a direct consequence of individual and corporate economic growth/resource boom is increase in business activities. These numerous business activities often give rise to disputes that require settlements. The question is how can these disputes be settled between BUSINESS PARTNERS, CUSTOMERS/CLIENTS within a very short time and in a manner that the disputants’ relationship is not adversely affected? No doubt litigation in court is usually hostile and would not achieve the purpose of preserving long standing business relationship. The truth is that most litigants put an end to the business relationship after going to court.
The problem is further complicated by our judicial system and its associated problem of which a major one is inadequate facilities to cope with the number of disputes occurring on daily basis. The courts are therefore handicap and the resultant effect is delay in resolving dispute. It is in the quest to get justice in a faster way and keep business relationships intact that gave raise to Arbitration and other Alternative Dispute Resolution. It is also in this light that i will throw more search-light on arbitration as a means of dispute resolution
Arbitration is a method of dispute resolution involving one or more neutral third parties who are usually agreed to by the disputing parties. But I must add that unlike litigation, parties agree to arbitrate, it is also a system built on law and which relies upon that law to make it effective both nationally and internationally. It is therefore a true statement that courts can exist without arbitration, but arbitration cannot exist without the courts. In other words there must have been a written agreement where parties agreed to submit dispute to arbitration. It is from such an agreement that arbitration derives its force/jurisdiction.
It is an alternative to litigation system and is quite different from court proceedings. The major enactment regulating arbitration in Nigeria is the Arbitration and Conciliation Act CAP. A18, LFN 2004 and The Rules made pursuant thereto. The Act is largely based on the United Nations Commission on International Trade Laws (UNCITRAL) model law of International Commercial Arbitration and other projects of UNCITRAL on dispute resolution.
For arbitration proceedings to arise there must have been an agreement providing for such proceedings. In otherwords, they must have been an agreement by parties to submit to arbitration in case of any dispute. See section 1 of the Arbitration and Conciliation Act CAP. A18 LFN.
Having entered an agreement to arbitrate, the party initiating recourse to arbitration called the Claimant shall give to the other party i.e. the Respondent a notice of arbitration. See Article 3 of the first schedule to the Arbitration Rule.
COMPOSITION & APPOINTMENT:
The parties may specify in the arbitration agreement the number of the arbitrators, but where no such agreement is made, the number of arbitrators shall be deemed to be three. The parties may also specify the procedure for appointment, however, were no such procedure is specified in case of arbitration with 3 arbitrators, each party shall appoint one arbitrator and the two thus appointed shall appoint the third. See section 6 and 7 Arbitration and Conciliation Act.
The advantages of arbitration amongst others are:
- Proceedings are in a flexible, relaxed and conducive atmosphere
- Proceedings are expeditious in arbitration. Award can be given within a limited space of time.
- The cost of arbitration proceedings is cheaper.
- Arbitration proceedings are done in private and the arbitrator will have special knowledge of the particular trade or business
- Arbitration preserves the confidentiality of the parties and dealings.
- The rules governing arbitration are less rigid and formalistic and therefore may contribute to a settlement in a more peaceful climate.
With the economic, social & political development and technical economic recession in the country, there was a considerable rise in the number of cases in our courts which made the process of litigation more and more time consuming expensive, technical & unduly cumbersome.
Further, commercial men & women are by name and practice of their business in a hurry, they would no doubt prefer a situation were their differences are ironed out in a friendly, congenial and business-like atmosphere.
No doubt the speed in which arbitration matters are disposed of distinguishes it from court proceedings. Nigerian courts seem congested with cases pending for several years. The fact that judges still have to record proceedings in long hands even in this computer era has made the situation more difficult. The cumulative effect of the above is that people seems to be losing confidence in the judicial process. A lot of people will rather not go to court and suffer in silence since going to court might take several years before justice could be done. It is not in dispute that justice delayed is justice denied.
It is in consideration of the above that arbitration appears to be gaining force in the Country today. As stated earlier, arbitration proceedings are conducted in a flexible, relaxed and conducive atmosphere, it is usually devoid of hostile attitude which counsels sometimes displace in a court room. Further the privacy of the parties and the matter in question are well secured and the speed to which the matter is disposed off is guaranteed.
It is not in doubt that one of the beauties of arbitration process is the speed to which matters are disposed of. It is therefore the duty of both the counsels in arbitration, the parties and the arbitral tribunal to ensure that speed in disposition of matters are well maintained and never compromise with. This is because doing otherwise will drag the whole process to the traditional court proceedings and that is a clear case of “salt losing its taste”
Parties and counsels in arbitration matters should aid the arbitral tribunal in ensuring that they get a speedy trial. It is their responsibilities to present the whole case before the tribunal and not to conceal material facts. Permit me to add that the quality of the decision given by the tribunal is largely dependent on the information/facts available to them as well as the skill/knowledge of law of the arbitral tribunal. The issue therefore is not only disposing matters within a limited period of time, but how well such matters are disposed of. This is because a decision wrongly given has adverse effects on the affected party.
Also, parties are advised to appoint an arbitrator who is not knowledgeable in the subject matter of the arbitration but is well grounded in the principles of law and its application to the subject matter. The above measures will ensure that arbitration proceedings to retain one of its unique features of speed and guarantee Justice to parties in dispute.
Bolaji Ogungbemi Esq.
(First published on LinkedIn)