Diane Okoko, MCIArb (UK)

June, 2017

New Frontiers in Arbitration and ADR–Opportunities for the Young Practitioner

Introduction: The concept of arbitration has evolved tremendously from a last resort mechanism for settlement of disputes to a more preferred means of dispute resolution. It can be said to be the singular most important mechanism for resolving commercial disputes from around the 1970s.

It exploded in recent years as an attractive alternative solution for the settlement of disputes especially within the business community and between States. It is, without comparison the most preferred dispute resolution option for trans-border commercial transactions due to the fact that its characteristic features make it attractive to corporations with its best assets being privacy and flexibility and global recognition of awards

As cross-border trade and investment continues to grow, so does the need for fair, neutral and efficient resolution of international commercial disputes. International arbitration has emerged as the principal dispute resolution method for such disputes. International arbitration has undergone a self-sustaining process of institutional evolution that has steadily enhanced arbitral authority. This judicialization process was sustained by the explosion of trade and investment, which generated a steady stream of high stakes disputes, and the efforts of elite arbitrators and the major centres to construct arbitration as a viable substitute for litigation in domestic courts1.

Evolution of Arbitration in Nigeria

Prior to Nigeria’s colonialism, disputes were resolved by respected members of the society or by the sovereign able assisted by his council of chiefs. During this era, Customary arbitration as it is later referred to, was almost in fact what we refer to today as Alternative Dispute Resolution ("ADR") due to the glaring similarities of the systems in terms of flexibility, cordiality, time saving and simple.

With the advent of the British, litigation relegated customary arbitration to the background but sooner than later, it was discovered that the composition of the litigation process is acrimonious and did not take into cognisance the value system of the precolonial societies. Though litigation has the advantage of finality and sanction, in most cases it destroys the business relationship between the parties. Either by design or coincidence, litigation with its inherence complexities became the main means of resolving commercial disputes in Nigeria. Hence, there grew a natural need amongst the business community, for a dispute mechanism that quickly resolves commercial disputes whilst preserving business relationships. As the Nigerian market became more competitive, businesses strived to maintain their customers while seeking new ones. But this is not always possible where commercial disputes drag on and on in the Courts.

With all the clogs experienced with litigation, businessmen have looked towards alternative sources of resolving their disputes in a manner that will have the least negative impact on the business and the business relationship.

In recent years and with the continued acceptance of arbitration as a preferred means for dispute resolution, the following factors are key indicators of the growth and awareness of ADR mechanisms among business associates, investors and legal practitioners ;

        • Increased arbitration institutions.

A number of arbitration Institutions and Centres have been established over the last decade as a means of promoting the practice of arbitration and as a means of creating better awareness for the practice. Some of these institutions and centres include; Lagos Court of Arbitration, Regional Centre for ICA Lagos (RCICAL), International Centre for Arbitration & Mediation, Abuja (ICAMA), Lagos Chamber of Commerce International Arbitration Centre and Janada International Centre for Arbitration & Mediation, Abuja (JICAM)

        • Arbitration- Friendly Courts.

Most commercial contracts today contain ADR clauses or arbitration clauses. The Courts in recent years are more inclined to refer parties to a dispute, to the multidoor court-house to explore settlement proceedings by way of their dispute through one of the ADR mechanisms available at the multi-door court-house. The Arbitration and Conciliation Act, although had been adopted and modified by many states of the Federation, is in the process of being amended to meet international practices. With the attitude of the Nigerian courts in recent times, there has been an increase in institutional and ad-hoc, local and international arbitrations as well as a tremendous rise in the activities of institutional arbitration centres in Nigeria and other parts of Africa, obvious factors pointing to the fact that Nigeria is equipping itself to grapple with the escalating commercial disputes resulting from the growth in business activities and increase in international trade and investment.

        • Increasing acceptance in construction.

As civilisation deepens, more and more Nigerian cities are becoming urbanised. With this, is the need for more construction to meet the standards of modernization. The construction industry is one of the most conflict and dispute ridden industries and its acceptance of arbitration as an alternative dispute resolution mechanism to litigation, as a means of curbing the high and exorbitant cost and the time spent on litigation.

        • Greater acceptance by Nigerian businesses of Nigeria as a seat of arbitration.

For decades, the Nigerian government has been signing arbitration agreements which make the seats of these arbitrations in places in the far West; the most preferred being London, Paris and Singapore. In recent years, however, the Nigerian government has come to realise that it serves itself nothing by the choice of these venues and has as embarked on a drive to make Nigeria an attractive seat, although these attempts have been less than successful yet. Some of these attempts include the establishment of more arbitral institutions and centres, thereby giving local businesses more comfort in embracing arbitration.

Present Realities and Implications for Young Practitioners

In recent times, the acceptance of arbitration is gaining ground in more industries than its original intent. This factor in itself, creates opportunities for young arbitration practitioners, who can cut their teeth in other less saturated fields of arbitral practice inclusive of;

        • Sports Arbitration.

        • Entertainment Arbitration.

        • Agricultural Arbitration.

        • Power Sector Arbitration.

The fact that arbitration as a means of dispute resolution is on the rise in the world of commercial transactions cannot be argued against, however, the present realities are that due to the private nature of arbitration (a factor which makes it a major attraction), there are very limited statistics on the number of disputes being settled through arbitration.

In spite of the dearth of statistics it is obvious that in the last couple of decades, there has been an increase in the number of major claims and aggregate value of these claims.


International Centre for Settlement of Investment Disputes (ICSID) Washington D.C

The institution that handles arbitration cases with the highest sums involved is presumably ICSID. Unfortunately, the Centre has not published any information in this regard in recent years, but there are statistics that in 2005 the average amount in dispute in ICSID cases was as high as 245 million USD

International Chamber of Commerce (ICC) Paris

Since its creation in 1923, The ICC International Court of Arbitration has administered more than 20,000 disputes involving parties and arbitrators from some 200 countries and independent territories.

        • ICC Arbitration in 2013.

• 767 Requests for Arbitration were filed with the ICC Court;

• 6 Applications for Emergency Measures

• Those Requests concerned 2,120 parties independent from 138 countries and territories;

• In 11,2% of cases at least one of the parties was a State or parastatal entity;

• The place of arbitration was located in 63 countries throughout the world;

• Arbitrators of 86 nationalities were appointed or confirmed under the ICC Rules;

        • ICC Arbitration in 2014.

• 791 Requests for Arbitration were filed with the ICC Court;

• 6 Applications for Emergency Measures

• Those Requests concerned 2,222 parties from 140 countries and independent territories;

• In 10.7% of cases at least one of the parties was a State or parastatal entity;

• The place of arbitration was located in 57 countries throughout the world;

• Arbitrators of 79 nationalities were appointed or confirmed under the ICC Rules;

• The amount in dispute was under one million US dollars in 23.5% of new cases;

• 459 awards were rendered.

        • ICC Arbitration in 2015.

• 801 Requests for Arbitration were filed with the ICC Court;

• 10 Applications for Emergency Measures

• Those Requests concerned 2,283 parties from 133 countries and independent territories;

• In 13.1% of cases at least one of the parties was a State or parastatal entity;

• The place of arbitration was located in 56 countries throughout the world;

• Arbitrators of 77 nationalities were appointed or confirmed under the ICC Rules;

• The amount in dispute was under one million US dollars in 23.2% of new cases;

• 498 awards were rendered.

The Good Arbitrator

A lot can be said about new opportunities for the young practitioner but it is no news that arbitral references still revolve around a select few (the so called “cabal”). This may not be totally unconnected with the fact parties have the opportunity to choose the person who they would like to resolve their dispute should they have one and who other than one who has the skills, training and knowledge to grant them the justice they seek?

The same way that litigants are confident that the judge sitting over their cases are qualified and trained to so act, parties can only repose confidence in an arbitrator wo they perceive as “good”, in the sense of qualification, skill, expertise and experience, because an arbitration is only as good as the arbitrator.

Young practitioners must seek to become “good” arbitrators by possessing the requite competence; knowledge and expertise, have good communication skills; patience, understanding, flexibility and be a good listener, be objective; this lends credence and integrity to the process, be discreet; show respect for privacy of the parties, devote time to the process and be diligent and be decisive.

Conclusion

To achieve the best in anything, you need to see the end from the beginning. See Beyond! The young arbitrator must see arbitration as a career, catch a glimpse of where he wants to be and decide the kind of arbitrator he wants to become.

Because commercial disputes will always be on the rise as trans-border and even domestic trade increases, there will always be room for a career in arbitration to bud. A sure way of harnessing the growing opportunities inherent in arbitration is to be a good arbitrator by;

        • Training and re-training yourself

        • Honing your skills;

        • Watch and learn – Get a mentor;

        • Get Involved; volunteer; and

        • Take steps!

Nothing comes to you, you have to get up and take it.

Thank You


TAGS: Law - Arbitration


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