New ADR Bill a Challenge to Practitioners By May Agbamuche-Mbu

Only last week it was reported that a new survey released by Bloomberg has projected that Nigeria, China, the Philippines, Kenya, India and Indonesia will rank among the 20 fastest growing economies in the world this year. Nigeria it said is expected to have a growth rate of 4.9 % and was ranked 6th behind China at 7%. A rather interesting and encouraging survey considering the rather sorry state the economy is in at the moment. Nevertheless we cannot dismiss this survey with a stroke of a pen as Nigeria is still an attractive destination for investors who have not been deterred by the precipitous fall in oil prices and the subsequent crash of the Naira as surprisingly the only word of caution I have heard has been to do with the elections and their outcome. The government is constantly doing all it can to attract foreign investment and that cannot be denied.

While we all wait with great expectation and trepidation over the elections which comes up later this month the National Assembly has been working assiduously to pass certain legislations of great importance to them before the end of this legislative year. Last week all hell broke loose among diverse stakeholders in the practice of Alternative Dispute Resolution (ADR) in Nigeria regarding the passing by the House of Representative of the National Alternative Dispute Resolution Regulatory Commission (Establishment, etc.) Bill 2013 and the subsequent public hearing at the Senate for deliberation. In 2013 ADR practitioners had written in opposition to the bill and with all sincerity put up a good campaign against it but from all indications their efforts have come to nothing. As the battle to see an end to the bill rages on, I am indeed puzzled by why stakeholders were not invited to the National Assembly during the initial stages of deliberations. There are well established internationally recognised ADR institutions in this country namely: the Chartered Institute of Arbitrators, Nigeria Branch, International Chamber of Commerce Nigeria, Lagos Chamber of Commerce International Arbitration Centre, Regional Centre for International Commercial Arbitration, Lagos Court of Arbitration, International Centre for Arbitration and Mediation Abuja, Maritime Arbitrators Association of Nigeria, Nigeria Chartered Institute of Arbitrators and Negotiations and Conflict Management Group to name a few.

Section 7(1) of the Bill states that ‘the Commission shall regulate, through the process of accreditation, all Alternative Dispute Resolution bodies and institutions engaged in practice training, education or skills acquisition in alternative dispute resolution mechanisms.’ Furthermore section 10 provides for the establishment of State Alternative Dispute Resolution Centres in each state headed by a Director appointed by the Commission. A source of great concern is the 36 ADR State regulatory commissions to be set up and the N22 billion earmarked for the setting up of the Commission. The sum if true is so ludicrous you cannot but be amazed at the sheer thoughtlessness of this bill. At a time when the economy is in desperate need of being salvaged, I cannot believe that the promoters of this bill are operating in this same country and neither are they on the same page as the Executive and the Judiciary in particular who are in desperate need of more funding.

In the last decade Arbitration Practitioners have worked hard both nationally and internationally to put the name of Nigeria in the international forefront of best practices.
Only last November at the swearing in of the new Chief Justice of Nigeria, Justice Mahmud Mohammed he particularly singled out his desire to promote the use of Alternative Dispute Resolution  (ADR) processes, a highly effective means as we all know for resolving disputes other than by going to court. One cannot but notice the steady progress ADR has made in recent years in this country. Party autonomy, privacy, separability, arbitrability and non –judicial interference are key fundamental principles. Bilateral Investment Treaties (BIT) are often signed with super powers like the United States of America to protect investments in theses countries, where investor rights are not always seen as being already fully protected and this is why arbitration in particular, as it is international in nature, is critical to any developing nation, as foreign investors need to protect their investments and are often reluctant to entrust the fate of such investments to the foreign country’s courts. They need to be confident in the legal process in the event a dispute arises that threatens their multi million-dollar investments and projects as such arbitration laws must meet international standards. To further highlight the value of Arbitration, it has been clearly stated in the official preparatory record to the UNCITRAL Model Law on International Commercial Arbitration that;

1 Arbitration helps to improve international economic relations  by providing a mechanism that reduces the risk of transnational commerce. When business people enter into foreign trade and investment transactions, they hope that there will be no future disagreements but they fear that disputes may arise. The possibility of future disputes is seen as one of the risks of the transaction. The risk is greater when businessmen cannot be sure that reliable procedures are available to resolve any such dispute promptly and fairly. Therefore, when risk is increased because effective dispute resolution procedures are not available, businesses react in one of two ways: either they refuse to enter into the transaction because the risk is too great, or they raise the price to compensate for the additional hazard. In either event, the free flow of trade is hampered. On the other hand, when businesses are confident that laws and procedures exist so that disputes can be resolved efficiently, the conduct of trade and investment is facilitated.

2. Arbitration also provides the possibility of a true international forum where Arbitrators are appointed through party autonomy.

3. Parties also have the opportunity to choose procedural rules that are familiar to both sides. In addition, such party autonomy allows businesses to agree to conduct their Arbitration in third countries and to have nationals of states other than that of the parties as the presiding or sole Arbitrator.

4. Harmonious international economic relations are important building blocks in the structure of global peace.
Another bone of contention emanating from the NADRR Commission Bill is whether the National Assembly has the power to make regulations on ADR. The 1999 Constitution under the Exclusive Legislative List S. 49 covers ‘professional occupations as may be designated by the National Assembly’ but would the National Assembly unilaterally consider ADR as a professional occupation? That decision in itself would be acting above their powers and therefore it does not at this instance have the power to make such a regulation on ADR. We all know that the Arbitration and Conciliation Act 1988 needs to be reformed but with all honesty there are many more areas of greater concern that the National Assembly should zero its searchlight on. Interestingly enough there are numerous bills all in a very long queue such as the Petroleum Industry Bill and 15 Administration of Justice Bills among numerous others all waiting to be passed by this National Assembly.

The entire NADRR Commission Bill appears to be a badly orchestrated scheme for ‘jobs for the boys’ and not intended in any way, shape or form to add value to the ADR process in this country. The NADRR Commission Bill should therefore never see the light of day in its current form. In countries such as the UK and South Africa they have self-regulatory accreditation councils and this may be a path towards genuine reform of the ADR sector.