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The Fundamentality Of Due Diligence In Choosing Arbitral Institutions

by Legalnaija | Jan 29, 2021 | Uncategorized

INTRODUCTION

This paper attempts to discuss the arbitral
institutions and the considerations parties and counsel must contemplate in
selecting an arbitral institution, which is a crucial process and can indicate
from the on-set, the seat of arbitration which is primary in initiating,
deliberating and enforcing an arbitral award.

This discourse provides a comparative
analysis of some top global arbitration institutions and the advantages or
challenges arbitration institution users must reflect on in choosing an
institution, as well as providing a further insight into the growing trend in switching
between Arbitration and Mediation and its efficacy in resolving international
disputes with a particular focus on the emerging areas in Africa, particularly
Nigeria.

ARBITRATION
AGREEMENT VIS-À-VIS ARBITRATION CLAUSES

Most arbitration agreements are entered
into as exit strategies, they are inserted into agreements without much thought
as to the dynamics of the arbitration proceedings in the event the contractual
relationship actually goes wrong.

No partner wants to be the one proffering
detailed solutions as to how their marriage should be dissolved if it gets to
that, but as much as we all want a happy ending, some marriages must dissolve.
Thus, when things go wrong, parties have to ensure that their arbitration
agreements fulfil their expectations of an easy way out; the best ‘exit
strategy’.

Practice has shown that parties enter into
arbitration agreements either in compliance with global standards and trend or
with limited background information. This presentation focuses on guiding
individual and businesses in choosing the ‘right’ arbitration institution when
drafting arbitration agreements.

The foremost choice to make in drafting
arbitration agreements is to decide on what form the terms should take, as an
ad-hoc arbitration or institutional arbitration.

An ad hoc arbitration clause, requires a
less formal structure. Hence, it may be preferable for parties to create a
detailed structure for the arbitration in the agreement, or else agree to the
application of non-administered arbitration rules like that of the United
Nations Commission on International Trade Law (UNCITRAL).

In institutional arbitration, the task of
agreeing to relevant procedures can be fairly easy, as all institutions have
their set of rules governing the conduct of the arbitration process if there is
no contrary agreement between the parties.

A survey of international arbitration users
in 2015 found that 79% of the arbitrations they were involved in over the
previous five years (2010-2015) were institutional arbitrations (2015
International Arbitration Survey: Improvements and Innovations in International
Arbitration by the School of International Arbitration at Queen Mary University
of London. The survey is available on the QMUL’s website).

There are several reasons for this
preference for institutional arbitration. An institution can lend political or
moral weight to awards. More practically, because institutional rules are
designed to regulate the proceedings comprehensively from beginning to end, the
institutions are better suited to cater for contingencies that might arise,
even if (as sometimes happens) a party fails or refuses to cooperate. By
incorporating an institution’s rules into the contract, contracting parties
also avoid the time and expense of drafting a suitable ad hoc clause.

As noted above, the institution will also
assume administrative responsibility for the arbitration, and take care of
fundamental aspects of the arbitration procedure. The fees and expenses of the
arbitration are, with varying degrees of certainty, regulated, and some
arbitral institutions independently vet awards to ensure enforceability.

WHY
CHOOSE AN ARBITRATION INSTITUTION?

Arbitration institutions have their
distinct features in terms of their modus and form. Some of these features are
determined by the institutions based on their peculiar services, like the
expensive commencement fee of the International Centre for Settlement of
Investment Dispute, while others are not so much in control of the
institutions, like territorial locations.

The London Court of International
Arbitration (LCIA) for example, is expectedly situate in London. Therefore,
just like determining what size of shoes to buy according to the size of one’s
foot, so is choosing an arbitration institution according to the peculiarity of
the nature of business or relationship entered into.

It is imperative that parties decide what
arbitration institution with a profound knowledge of the various systems and
mechanisms of the institution and how they best fit in with their business.

There are many institutions to choose from.
As a general rule, newly formed institutions or institutions without a proven
track record should be avoided.

That aside, there is no magic formula for
choosing between them. Increasingly, institutions and institutional rules are
offering similar processes with little to distinguish them. An example is the
widespread introduction of mechanisms such as emergency arbitration, once a key
distinguishing feature of only certain leading institutions. Such similarity
leads parties to look to more subjective factors in deciding which institution
to use: familiarity with the institution, their opinion of the international
acceptability or reputation of a given institution, the proactiveness and
responsiveness of the institution’s staff, and the institution’s neutrality or
“internationalism”.

It is important to recognise that
institutional arbitration rules provide only a framework for the procedure of
the arbitration. The way in which the arbitration is conducted will be
determined by the specific approach of the arbitrators. Factors such as their
degree of experience in international arbitration, legal background and
training, and views on the legal issues for determination in the arbitration
will influence their approach. It is therefore essential to consider carefully
the approach you want the tribunal to take when selecting your arbitrator.

In choosing an arbitration Institution,
certain criteria have to be taken into consideration. Some of the major ones
include:

(i)
The seat of the arbitration;

(ii)
The level of involvement of the arbitration
Institution;

(iii)
Privacy;

(iv)
Fast track arbitration and early determination;

(v)
The
relative abilities and expertise of the institutions with respect to types of
subject-matters;

(vi)
The relative experience and ability of
the institutions’ administrators or secretariats respecting case
administration;

(vii)
Relative
reputation insofar as reputation may enhance or undermine the prospects for
enforcement of an arbitral award;

(viii)
Cost,
both administrative and arbitrator fees; and

(ix)
Whether
certain institutions are better suited for arbitration in certain locations.

The Seat
of Arbitration

The ‘seat’ of arbitration, although
abstract in form, is a subject of a legal conflict. Simply, the ‘seat’ of
arbitration is the legal domicile or home of international arbitration. It
provides for the nation’s Arbitration Law that would govern the arbitration.

On the other hand, the ‘venue’ or ‘place’
of arbitration refers to the specific geographical location for the purpose of
the arbitration proceedings. The principles that guide courts to resolve the
disputes of seats are the provisions of the arbitration clause.

Generally, seats imply the laws of the
arbitration that would guide the arbitration procedure while the venue
determines the physical location of the arbitration. The Arbitration law of
Nigeria (The Arbitration and Conciliation Act of 2004) does not expressly
provide for the seat or venue of arbitration, however the court in NNPC v LutinInv Ltd (2006) 2 NWLR (pt. 965)
506 interpreted the usage of ‘place’ to also mean ‘venue’.

In a proceeding to enforce the award of
USD6.6 billion arbitration award against Nigeria, Nigeria argued that the
arbitration was supposed to be seated in Nigeria and not England and therefore
the award should not stand. The court held that reference to ‘venue’ in an
arbitration agreement referred to the legal seat. The agreement in this matter
was actually couched to allow the Arbitration and Conciliation Act of 2004
(ACA) to be applicable, but it went ahead and provided that the venue of the
Arbitration should be London, England or as parties agree. Although Nigeria
successfully overturned the award, it was not based on the ‘seat’ argument, but
on public policy grounds. The court found that since the proceeding took place
in London, Nigerian courts cannot set aside the award. The court’s decision was
based on the following reasons:

The
clause referred to venue “of the arbitration”, implying that it would
apply to the whole proceedings. This was compared with the language used
in the Nigerian ACA to refer to the physical location, for example where a
tribunal may “meet” or “hear witnesses, experts or the parties”.

The
clause stated that the venue of the arbitration “shall be” London. If the
reference to “venue” was to where the hearings would take place, it would
be inconvenient for this to be in London given the location of the
parties. The court reasoned that this was not something that the parties
were likely to have intended. In addition, the arbitration agreement
allowed the “venue” to be changed only by the parties, not the tribunal.
The selection of the hearing venue is typically decided by the
arbitrators, further indicating that the parties intended to refer to the
legal seat.

Reference
to the rules of the Nigerian ACA was not inconsistent with the choice of
England as the seat. Any non-mandatory provisions of the Arbitration Act
1996 were displaced and only the mandatory provisions would continue to
apply.

The seat is a key factor in
any arbitration. It provides a “home” for the arbitration, determines the law
governing the relationship between the tribunal and the courts, and also
determines which court has supervisory jurisdiction over the arbitration
(giving them the power to, among other things, set aside an award). The seat
will also determine where the award has been made, which is significant when
trying to enforce the award.

The physical location of an
arbitration does not have the same legal significance. Generally speaking, the
location is decided based on convenience of all involved. It does not need to
be (and frequently isn’t) the same as the legal seat of the arbitration.

It is important for parties
to designate the legal seat of an arbitration in their arbitration agreement.
This case underlines the benefits of using clear terms when referring to the
intended seat in an arbitration agreement to ensure that the legal seat is
where the parties intended and to avoid unnecessary procedural disputes.

Level of Institutional Involvement

Arbitral institutions have
varying levels of involvement in managing and administering arbitrations.
Institutions such as the Hong Kong International Arbitration Centre (HKIAC),
for example, promote their “light touch” approach with rules
emphasising party autonomy and entrusting the arbitrators with the primary
decision-making power. Other institutions, such as the International Court of
Arbitration of the International Chamber of Commerce (ICC), are known for more
intensive involvement in arbitrations. One practical example of these
contrasting approaches is in respect of scrutiny of arbitral awards.
Institutions like the ICC and the Singapore International Arbitration Centre
(SIAC) engage in a mandatory scrutiny and approval of draft awards of the
tribunal. The ICC Court performs the scrutiny process and may lay down
modifications as to the form of the award and, without affecting the tribunal’s
liberty of decision, may also draw the tribunal’s attention to points of
substance. The idea is to prevent the award suffering from defects in form or
substance that could give rise to difficulties at the enforcement stage. Many
other institutions, such as the HKIAC, London Court of International
Arbitration (LCIA), and the Arbitration Institute of the Stockholm Chamber of
Commerce (SCC), do not scrutinise or approve awards, leaving it to the tribunal
to render a valid award. This difference reflects the varying views about the
value of the scrutiny process, some parties consider the additional quality
assurance to be a benefit, while others see it as imposing unnecessary delay
and expense.

Cost of the Arbitration

There is no straight jacket as to which
institution is best, but each institution has its attendant advantage to
parties according to the peculiarity of the circumstance of each case. Let us
look at the cost variation of five popular Arbitration institutions to help
drive this point. The institutions are:

The
International Court of Arbitration of the International Chamber of
Commerce(ICC)
The
London Court of International Arbitration(LCIA)
The
Arbitration Institute of the Stockholm Chamber of Commerce(SCC)
The
Singapore International Arbitration Centre(SIAC)

i.
The International Court of Arbitration of the
International Chamber of Commerce(ICC)

In an ICC proceeding, the
arbitrator’s fee and administrative charges depend on the amount in dispute (ad
varolem system). The ICC offers a cost calculator on its website, which will
provide an estimate of the cost of an ICC proceeding according to the current
fee standards.

For the arbitrator’s fee, the ICC Rules set a
minimum and maximum amount. The ICC Court determines the exact cost by taking
into consideration the specific circumstances of the proceeding, such as, for
example, how complex the case is or how timely the tribunal rendered the award.
Where there is a tribunal involving three members, the arbitrator’s fee is
multiplied by three.

The administrative charges are based on a fixed
percentage of the amount in dispute.

ii.
The London Court of International Arbitration(LCIA)

In LCIA arbitration, the arbitrator’s fee and
administrative charges are largely fixed on an hourly rate basis.

After a party has nominated or the LCIA has
selected an arbitrator, the LCIA’s Secretariat asks the arbitrator to advise
the hourly rate applied in the case. The LCIA’s Schedule of Costs generally
sets a cap to this hourly rate, which is currently GBP 450 (USD 608.93 as of
10January2018).

In practice, the LCIA Court will recommend a
certain maximum rate based on the circumstances of the case before the
arbitrator advises the Secretariat about their hourly rate. The recommended fee
is often lower than the maximum rate. Normally, arbitrators follow the LCIA
Court’s recommendation. In cases with a modest amount in dispute, arbitrators
have charged hourly rates of between GBP 150 and GBP 200.

Administrative charges consist of the time-based
charges of the Secretariat, a non-refundable registration fee and an additional
fee equal to 5% of the total arbitration fee. The hourly fees of the members of
the Secretariat vary between GBP 150 and GBP 250, depending on the member’s
function in the Secretariat.

iii.
The Arbitration Institute of the Stockholm Chamber
of Commerce(SCC)

As in
the case of an ICC proceeding, the SCC’s arbitrator’s fee and administrative
charges depend on the amount in dispute. The SCC also offers a cost calculator
on its website.

As with
the ICC Rules, for the arbitrator’s fee, the SCC Rules set a minimum and a
maximum amount. However, where there is a three-member tribunal, the
arbitrator’s fee is not multiplied by three. Instead, the SCC’s cost schedule
defines the fee for the chairman of the tribunal only. The co-arbitrators
generally receive only 60% of such fee.

The
administrative charges are based on a fixed percentage.

As
typical for the ad varolem system, the costof the proceeding
is dependent on the value of the transaction in dispute; the higher the value,
the higher the cost. Overall, arbitrators’ fees and administrative charges are
considerably lower when compared to the ICC. The higher the amount in dispute
is, the bigger this gap is, which means that in proceedings with a high amount
in dispute, the cost difference is substantial.

iv.
The
Singapore International Arbitration Centre(SIAC)

          As
in ICC and SCC arbitration, the SIAC’s arbitrator’s fee and                    administrative
charges depend on the amount in dispute. The SIAC          offers a cost calculator on its website also.

          For
the arbitrator’s fee, the SIAC Schedule of Fees sets only a             maximum amount payable to each
arbitrator. As an alternative to the
Schedule of Fees, the parties may agree on another method for       determining the arbitrator’s fees. For the
administrative charges,        the SIAC
Schedule of Fees also sets a cap only.

          The
SIAC costs range somewhere in the middle between those of     the SCC and the ICC. In comparison to the
SCC, the gap between        costs is
subject to the amount in dispute involved.

NOTE:

          It
is important to note that the institution would not only claim a first filing fee but will also require some
pre-payments to be made.        (The
International Centre for Settlement of Investment Dispute           requires a $25,000 upfront before a
matter is submitted to it). Those          pre-payments
may be claimed before any meaningful step in the    proceeding. Also, the total cost of an arbitration proceeding is
more          than the sum of arbitrator’s
fee and administrative charges.                    Depending
on the applicable law in the arbitration proceeding, these           legal fees may become a major cost
driver. For example, even if the       LCIA
appears to be an affordable option compared to the ICC and               SIAC, assuming that the seat of
arbitration was London and the           applicable
law was English law, costs might add up quickly when a       Turkish party requires legal advice from an English law firm.

Conclusively, when it comes to cost,
although it is important, it is not everything. The ICC is the most expensive
institution; it is yet the most popular. There are other attendant
considerations when deciding an arbitral institution, although cost is
important.

Privacy

Privacy of arbitral proceedings is one of
the key advantages of arbitration. The seat of the arbitration will often
determine what level of privacy and confidentiality is provided and, where
confidentiality is regarded as important, contracting parties should cater for
it in their arbitration agreement. That said, the approach of the institution
towards confidentiality may also be a factor when choosing the arbitral
institution; not all institutions provide for it as a default rule. The LCIA
and DIFC-LCIA Arbitration Centre (DIFC-LCIA) rules, for example, require the
parties to keep confidential all awards in the arbitration, as well as all
materials created for the purposes of the arbitration, and all other documents
produced by a party in the proceedings not otherwise in the public domain. Deliberations
of the tribunal also remain confidential, and neither institution publishes
awards without the prior written consent of the parties and the arbitral
tribunal. The ICC Rules, on the other hand, do not automatically oblige parties
to keep awards, materials and documents confidential, but simply empower the
tribunal, upon the request of a party, to make orders concerning the
confidentiality of proceedings or any other matters in connection with the
arbitration. Further, its Rules do not expressly prohibit publication of
awards, and the ICC regularly publishes anonymised excerpts from awards. From 1
January 2019 the ICC has adopted an opt-out approach to publication of its
awards: underacted awards may be published within 2 years of notification,
unless a party objects or requests redaction.

Expertise
in Certain Types of Cases/Industries

Another distinguishing feature that parties
may look for is whether the institution has expertise in the particular type of
case likely to arise under their contract or in the particular industry in
which they operate. A number of specialist institutions have been set up to
handle disputes in particular areas and industries. Examples include:

·
The Panel of Recognised International
Market Experts in Finance (P.R.I.M.E. Finance), an institution offering
mediation, arbitration and other dispute resolution services to the finance
sector;

·
The World Intellectual Property
Organisation (WIPO) Arbitration and Mediation Centre, which caters for
intellectual property and technology disputes;

·
The Court of Arbitration for Sport (CAS),
which administers sports-related arbitrations; and

·
The Chambre Arbitrale Maritime de Paris
which administers and supervises maritime arbitrations.

These institutions publish rules tailored
to the types of disputes they deal with, and maintain rosters of arbitrators
who specialise in those types of disputes. Most of the major arbitral
institutions (like the ICC and LCIA) do not specialise in this way; the
argument being that there is no need for the institution to be specialised as
long as the selected arbitrator is a specialist, or is permitted by the
institution’s rules to appoint experts and/or rely on expert evidence from
party-appointed experts. Nevertheless, parties may feel more comfortable
dealing with an institution that specialises in its field.

Fast-Track
Arbitration and Early Determination

In a survey of international arbitration
users, 92 per cent of respondents were in favour of the adoption of a
simplified “fast track” arbitration procedure for claims under a
certain value (2015 International Arbitration Survey: Improvements and
Innovations in International Arbitration by the School of International
Arbitration at Queen Mary University of London). Certain institutions provide
for expedited arbitration, which can be on a documents-only basis and before a
sole arbitrator. For example, under the SIAC Rules, the expedited procedure can
be applied for where the aggregate amount in dispute does not exceed SGD 6
million, the parties agree to use the procedure, or in cases of exceptional urgency.
The SCC also has separate expedited rules which the parties can agree to use.
As from 1 March 2017, the new ICC expedited procedure will automatically apply
to ICC arbitrations where the amounts in dispute are below USD 2 million.
Parties can choose to use the procedure for higher value cases. If contracting
parties want to have the flexibility to adopt a fast-track procedure, this
should be taken into consideration.

COMPARATIVE
ANALYSIS OF SOME TOP ARBITRATION INSTITUTES

Various arbitration institutions have their
own system of operations according to various features. Let us look at some of
the top institutions and how they operate regarding the following:

Suitability/particularity, method of
commencing actions, number of arbitrators, appointment of arbitrators,
procedure, timeframe for preparation of award.

1.
Hong-Kong
International Arbitration Centre:

i.
Suitability:International
arbitrations of all types, and is a common choice for transactions involving a
party from the People’s Republic of China.

ii.
Method
of Commencing Actions:By notice in writing to HKIAC and all other
parties.

iii.
Number
of Arbitrators:In the absence of agreement between the parties, HKIAC
decides whether one or three is appropriate.

iv.
Appointment
of Arbitrators:Where there is one arbitrator, the parties jointly
designate an arbitrator, failing which HKIAC will appoint. Where there are
three arbitrators, each party designates one arbitrator and the designated
arbitrators nominate the presiding arbitrator, failing which the HKIAC will
appoint.

v.
Procedure:Subject
to the HKIAC Rules, the tribunal has discretion on how to conduct proceedings

vi.
Timeframe
for Preparation of Award:Save for arbitrations under the expedited
procedures, there is no prescribed time frame for delivery of an award.

2.
International
Court of Arbitration of the International Chamber of Commerce (ICC):

i.
Suitability:International
arbitrations of all types, particularly where the parties come from very
different backgrounds or those where administrative support or guidance is of
benefit.

ii.
Method
of Commencing Actions:By request sent to the Secretariat of the
ICC Court, which then notifies the respondent.

iii.
Number
of Arbitrators:In the absence of agreement between the parties, one,
unless the ICC decides three is appropriate.

iv.
Appointment
of Arbitrators:The parties by agreement or nomination (to be confirmed
by the ICC Court). In the absence of agreement, the ICC Court will appoint the
arbitrators.

v.
Procedure:The
parties may supplement the Rules in their arbitration agreement. Subject to the
Rules, the tribunal has discretion in how to conduct proceedings.

vi.
Timeframe
for Preparation of Award: Six months from the signature of the
Terms of Reference unless the ICC Court specifies otherwise. This is extendable
and the ICC can take the efficiency and expeditiousness of the tribunal’s
handling of the dispute into account when deciding fees. Extensions are
typically granted.

3.
London
Court of International Arbitration (LCIA)

i.
Suitability:International
arbitrations of all types. Often used in disputes involving either a Russian
and/or Common Wealth of Independent States (CIS)related party and/or a party
ultimately controlled by a Russian/CIS entity

ii.
Method
of Commencing Actions: By request sent to the LCIA and the
respondent.

iii.
Number
of Arbitrators:In the absence of agreement between the parties, one,
unless the LCIA decides three is appropriate.

iv.
Appointment
of Arbitrators:The LCIA Court with reference to the methods or
criteria agreed by the parties. The parties can nominate an arbitrator but only
the LCIA Court can appoint.

v.
Procedure:The
parties and tribunal shall make contact within 21 days of notification of the
formation of the tribunal. The parties may agree on joint proposals for the conduct
of the arbitration and are encouraged to do so in consultation with the
tribunal.

vi.
Timeframe
for Preparation of Award: As soon as reasonably possible (the
tribunal shall endeavour to do so no later than three months following the
parties’ last submissions), in accordance with the timetable notified to the
parties and the Registrar.

INSTITUTIONAL
ARBITRATION IN AFRICA

Currently, nearly 100 arbitration
institutions of various sizes and areas of focus exist across Africa.

As expected, most of these institutions
will not earn strong global or even regional reputations. At the moment, at
least, the ICC and the LCIA continue to dominate international arbitration in
Africa, as they do international arbitration worldwide. In a 2018 survey of
almost 800 arbitration practitioners and users by White & Case and Queen
Mary University, African respondents chose the ICC and LCIA as the top two
institutions. The Lagos Court of Arbitration (LCA) ranked as the highest
African arbitration institution, although in sixth place. So, despite the
multitude of emerging African arbitration institutions, most African users
appear to continue to prefer to resolve their disputes primarily under the
auspices of the ICC and LCIA.

The reasons for this are complex and
multi-faceted, though this preference is most likely linked to the ICC’s and
the LCIA’s proven track records and substantial experience, which underlie
their well-established reputations. The emphasis on reputation, recognition and
experience effectively results in a greater weighting towards long-established
institutions. This means it may take a long time before newer arbitration
institutions in Africa can build their own international following and
performance track record.

No matter how high-quality an arbitration
institution’s administration, it takes a long time for that quality to
translate into reputation and then utilization. For example, the Singapore
International Arbitration Centre (SIAC) commenced operations in 1991, but did
not register 90 new cases in one year until 2006. The number of new SIAC cases
increased to 160 in 2009, and SIAC has received a steady inflow of new cases
each year since then, with 479 new cases in 2019.

Recent trends suggest that parties are
increasingly using top African arbitration institutions to resolve their
disputes. According to survey respondents in the School of Oriental and African
Studies (SOAS) Arbitration in Africa Survey 2020 Report, the top five arbitral
centres in Africa are the Arbitration Foundation of Southern Africa (AFSA), the
Cairo Regional Centre for International Commercial Arbitration (CRCICA), the
Kigali International Arbitration Centre (KIAC), the Lagos Court of Arbitration
(LCA), and the Nairobi Centre for International Arbitration (NCIA). CRCICA
had administered a total of 1,385 cases at the end of 2019, including 82 new
cases in 2019 alone. AFSA also has a caseload of approximately 60
international matters in addition to its domestic caseload of about 500
matters.⁸The caseloads of KIAC, NCIAand the LCA are also growing,
while the MCCI Arbitration and Mediation Centre (MARC), the alternative dispute
resolution arm of the Mauritius Chamber of Commerce and Industry, also remains
a high profile centre. In addition, regional institutions like OHADA’s Court of
Justice and Arbitration are reformingtheir systems to play a more prominent
role as an international arbitration-administering institution. In November
2017, the OHADA Council of Ministers approved an update to the Uniform Act on
Arbitration and the Common Court of Justice and Arbitration Rules to reflect
recent developments in international arbitration practice.

The increase in the number of cases
administered by top African arbitral institutions may be a sign that these
institutions are coming of age and developing their reputations. The growth,
even if slow, of these institutions shows that users are having good
experiences with them, including state-of-the-art facilities¹¹and
well-trained work forces dedicated to the efficient management of arbitration
disputes. Modern, party-friendly rules that cater to users’ needs also reassure
parties that their disputes will be resolved in a fair, efficient and
transparent manner.

MECHANISM;
INTERFACE BETWEEN ARBITRATION AND MEDIATION

The ability of an institute to combine both
arbitration and mediation develops a hybrid process. An agreement between both parties can create
a pathway for a filter process yielding a relationship that can intertwine
mediation and arbitration in a process. That is mediation can take place prior
to the commencement of the arbitral process or after its commencement and vice
versa.

In an arbitration process, the dispute is
settled by an arbitrator which is binding on both parties, while in a mediation
process, the mediator does not make the decision, but guide both parties in
resolving the dispute in a confidential manner and help both sides tackle
difficult subjects. A mediator is a facilitator.

The ability of an
institution to combine both arbitration and mediation process to ensure a
collaborative agreement, there must be a combined use of mediation and
arbitration emerging in a dispute resolution approach inoffering parties a
number of benefits. These include resolving parties’ disputes cost-effectively
and quickly and obtaining a binding and internationally enforceable decision.The
agreement between the parties can acknowledge and provide for a filter process
i.e. a contractual recognition that mediation can take place prior to the
commencement of the arbitral process or after its commencement.

This is done by incorporating
mediation in a tiered dispute resolution clause. The parties can agree that a
mediation will take place at any stage of the arbitration process. This has the
advantage of providing a formal mechanism for resolution of the entire dispute
which statistically has a reasonable prospect of success before moving on to a
more complex and expensive arbitration with the associated disadvantages of
that process. It gives the parties a final opportunity to resolve the dispute
amicably and has positive consequences in terms of the prospect of maintaining
a commercial or other relationship.

However, to date there
has been little agreement on several aspects of the combined use of processes.
The academic debate is ongoing about acceptable ways of combining mediation and
arbitration. At the same time, there is little evidence to suggest that practitioners
actually use a combination of mediation and arbitration. In a recent empirical
study of the current use of mediation in combination with arbitration, the
results reveal that the combined approach is used to a relatively low extent,
which contrasts with widespread recognition of the benefits that it seems to
offer. In vast majority of cases, the mediation and arbitration stages are
conducted by different neutrals, while the mediation stage usually involves the
use of caucuses.

The United Nations
Convention on International Settlement Agreements Resulting from Mediation (the
“Singapore Convention” or the “Convention”) came into force on 12 September
2020. The Singapore Convention is a significant step for international
commercial dispute resolution, enabling enforcement of mediated settlement
agreements among its signatories. For international businesses this means that
they are presented with another viable and effective alternative to litigation
and arbitration in resolving their cross-border disputes, especially during the
global COVID-19 pandemic.

By facilitating a
negotiated settlement between parties, mediation can usually provide them with
a faster, more cost-effective and commercial method of resolving disputes than
resorting to litigation and arbitration. With the aid of neutral and qualified
professionals, mediated settlements focus parties onto what really matters to
them, ironing out their differences swiftly in confidentiality while preserving
businesses’ reputation and their long term relationship. However, until the
Singapore Convention, no harmonised enforcement mechanism existed for these
negotiated settlements. Hence, the only remedy for a party who was faced with
an opponent refusing to honour the terms of such negotiated settlement, was to
bring an action for breach of contract and then seek to have the subsequent
judgment enforced, potentially in multiple jurisdictions. This was an expensive
and inefficient deterrent for parties to even consider mediation for the
resolution of their disputes, so they instead turned to arbitration or
litigation from the outset. Now, the Singapore Convention has the potential to
greatly increase the appeal of mediation as a mechanism of resolving commercial
disputes with a cross-border dimension. The Convention provides parties who
have agreed a mediated settlement with a uniform and efficient mechanism to
enforce the terms of that agreement in other jurisdictions, in the way that the
New York Convention on the Recognition and Enforcement of Arbitral Awards (the
“New York Convention”) does for international arbitral awards.

CHALLENGES
OF THE ARBITRATION INSTITUTIONS

The growing use and evolution of
arbitration has led to a burgeoning number of global and regional arbitral
institutions. Every institution is thus competing to secure, keep or expand its
own share of the arbitration world.

New arbitral institutions have been set up
in places such as Central Asia and Africa.

In November 2018, the Tashkent
International Arbitration Centre (TIAC) was established in Uzbekistan. TIAC
aims to be a viable alternative to arbitrating at Paris or London based
institutions. TIAC’s paradigms of success are cost, efficiency, compliance with
international best practices and top-class arbitrators. TIAC arbitration rules
adopt the latest thinking in arbitration. For instance, the rules enhance
transparency and legitimacy by giving additional powers to arbitrators (e.g.
Articles 10 and 20 of the TIAC Rules).

In Africa, the African Court of Mediation
and Arbitration (CAMAR) was established in April 2019. The Court, aiming to
open new perspectives and a better-organized legal framework, handles disputes
involving states, African companies and multinationals operating in the
continent. Such disputes have thus far been resolved before institutions in The
Hague, Paris or London. As rightly observed by Gregory Travaini, CAMAR “could
well be a contributing step towards the “Africanization” of arbitration”.

The ever-expanding list of new institutions
all over the globe, illustrated by examples above, has provoked strong
competition among the existing and new institutions. Internationally accredited
and well-known institutions, notably in Europe and Asia, have responded with
significant efforts in revising their respective arbitral rules (e.g. ICC Rules
2018 or Hong Kong International Arbitration Centre (HKIAC) Rules 2018).

The surplus of arbitral institutions has
some negative effects. Among others, the perceived efforts to attract users by
offering an increased number of services and tailor it to their own needs may
have a direct impact on the efficiency of the proceedings, which is one of the
key features of arbitration, by leading thus to unnecessary or even unwelcome
delays and costs. A risk of greater concern is that “sham” institutions or even
institutions that have no expertise or resources to administer arbitrations
properly will, in a spill over effect, also harm the profile of established
institutions and international arbitration in general. A recent example is the
18 billion Egyptian pound award administered by the Cairo-based International
Arbitration Centre (IAC), where the Egyptian Criminal Court sentenced to
prison both, the executive director of the IAC, under whose auspices the
award was rendered, and the administrative secretary to the IAC of the arbitral
institution in Cairo, for aiding and abetting the fraud. The question, yet to be
answered, is whether this recent case will have any impact on the caseload of
the IAC in the future.

CONCLUSION
AND RECOMMENDATIONS

The best way for arbitral institutions is
to establish cooperation between themselves and build similar rules. On 19 December
2017, the Singapore International Arbitration Centre (SIAC) launched its
Proposal on Cross-Institution Cooperation for Consolidation of International
Arbitral Proceedings (Proposal). By way of inspiration, AFSA and the Shanghai
International Arbitration Centre have created the China-Africa Joint
Arbitration Centre (CAJAC) in Johannesburg and Shanghai. Other innovative
efforts for cooperation include the Memorandum of Understanding (“MoU’s”)
signed by the ICC aiming to facilitate knowledge sharing and best-in-class
services on this field. More recently, Saudi Arabia’s Centre for Commercial
Arbitration (SCCA) and Dubai International Financial Centre (DIFC) Courts have
also signed a MoU. These “mutual assistance” agreements mark a milestone in the
cooperation and operation of arbitral institutions all over the globe, as they
strive towards harmonization and consistency among arbitral rules. Therefore,
as rightly stressed by Mr. Travaini, it seems that “cooperation would be more
fruitful than dry competition”.

PROFILE
OF MR OYETOLA MUYIWA ATOYEBI, SAN

Mr.
OyetolaMuyiwaAtoyebi, SAN, is a
seasoned Arbitrator and legal expert with expertise in commercial andcross
border disputes,with a formidable level of expertiseand over a decade’s worth of experience in the practice
of Alternative Dispute Resolution mechanisms (ADR).

Drawing on expertise from a technical and
commercial background, he has market-leading and in-depth insight into a range
of industries, and has successfully
resolved and managed several business disputes through efficient,
cost-effective and impartial ways of overcoming barriers at any stage of
conflict.Hehas been
appointed as Presiding Arbitrator and as Member of several panels on countless Arbitral
proceedings. He has served on
both Domestic and International Arbitral Tribunals and he approaches issues with
a clear understanding of the commercial objectives of the different references.

His
outstanding performance has attracted international recognitions and awards. He
is the youngest lawyer in Nigeria’s history to be conferred with the highly
coveted rank of a Senior Advocate of Nigeria (SAN). He is the Managing Partner
of OMAPLEX Law Firm, an established law firm driven by technology
innovation. As an expert in emerging areas of law practice, he has core
competence in Commercial Transactions, ADR ,Intellectual Property, Cyber
Security and Fintech. He is described as the go-to person when it comes to
complex issues that arise in dispute resolution.

REFERENCES

1. The
United Nations Commission on International Trade Law Arbitration Rules (as
revised in 2010). Please note that UNCITRAL is not an arbitral institution and
does not administer arbitrations.

2. 2015 International
Arbitration Survey: Improvements and Innovations in International Arbitration
by the School of International Arbitration at Queen Mary University of London.
The survey is available on the QMUL’s website:
http://www.arbitration.qmul.ac.uk/research/2015.

3. See the
2018 International Arbitration Survey: The Evolution of International
Arbitration by the School of International Arbitration at Queen Mary University
of London, which recorded the reasons for respondents’ preference for certain
institutions. The top three reasons were “general reputation and
recognition of the institution”, “high level of administration
(including efficiency, pro-activeness, facilities, quality of staff)”, and
“previous experience of the institution”. The survey is available on
the QMUL’s website: http://www.arbitration.qmul.ac.uk/research/2018.

4. Paragraphs
40-46 of the ICC’s updated Note to Parties and Arbitral Tribunals on the
Conduct of the Arbitration under the ICC Rules of Arbitration.

5. 2015 International Arbitration Survey:
Improvements and Innovations in International Arbitration by the School of
International Arbitration at Queen Mary University of London. Its 2018 survey,
The Evolution of International Arbitration, also reflected this preference,
with increased expedited procedures for claims regarded as one the key
improvements that would lead to greater use of international arbitration across
all industries and sectors. Both surveys are available on the QMUL’s website: http://www.arbitration.qmul.ac.uk/research/.

6. https://uncitral.un.org/en/texts/arbitration

Cutlasses to Drones: How Nigeria’s Restriction on Drone Usage is Delaying the Birth of a Tech -Driven Agro Economy

by Legalnaija | Jan 19, 2021 | Uncategorized

“Intellectual innovation could only occur in the kind of
tolerant societies in which sometimes outrageous ideas proposed by highly eccentric
men would not entail a violent response against ‘heresy’ and ‘apostasy.”

Joel Morky, American Economic Historian.

Introduction

In 2015, Tanzanian authorities
revealed that between 2009 and 2014, as much as 67,000 elephants were lost to
poaching activities in the country.[1]
To help in addressing the nation’s poaching problem, Bat hawk Recon, a
Tanzanian start up, began deploying drones to help provide the much needed
surveillance for tracking and apprehending elephant poachers. Zipline, an
American robotics company has successfully aided the Rwandan government to
reduce maternal mortality by deploying its drones to transport blood donations
to inaccessible parts of the country.

Similarly, The ThirdEye Project in Kenya
currently helps farmers reach informed decisions on how best to optimally
utilise water, fertilizer and labour on their farms by flying sensor-equipped
drones capable of detecting farm areas where these scarce resources are most
needed.

The above are just but a few instances of the
numerous benefits obtainable from drone application to societal challenges in
Africa. Naturally, it would be expected that the Nigerian government like its
African counterparts would similarly deploy drone technology to address
peculiar challenges. To the disappointment of many however, the Nigeria Civil
Aviation Authority (NCAA), in May 2016, placed seemingly tight restrictions on the
usage of drone technology in the country. It is the argument in some quarters
that the restrictions placed by the government are well founded considering
that drone technology regardless of its positive applications in bettering
mankind, can also be deployed for destructive, immoral and debauched ends. For example,
CNN reported in 2019 that domestic drones carelessly flown at an airport in
Gatwick, England affected, the flights of over 100,000 passengers.[2] Similarly,
in what has been described as the ‘biggest drone conspiracy in history’ by
British authorities, the BBC in 2018 reported the jailing of a 7-man gang
following their conviction for using drones to transport drugs worth over
£500,000 into a United Kingdom, UK prison. [3]

On the other side of the divide, the popular
argument is that overbearing restrictions on the technology would only operate
to deny Nigeria from exploring the numerous positive applications of drones in
healthcare, education, trade and indeed agriculture, the focal point of this
article.

The
Application of Drone Technology to Agriculture

Drones have been innovatively applied to
farming practices and agriculture at large in a myriad of ways:

1.
They are currently being utilised by
mechanized farmers to analyse soil conditions with a view to improving crop
yield, determining soil nutrient deficiency, amongst other things. This is
typically achieved by equipping drones with sensors programmed to collect and
analyse data upon which farmers can take informed steps targeted at improving
soil conditions/quality (for example; mulching, planting cover crops and the introduction
of organic matter for better soil quality).

2.
In a faster and more efficient manner,
planting is now being carried out by farmers who deploy drones to shoot seeds
into the soil. DroneSeed, an American start-up is currently using this
technology to plant more trees and cover more acres in its reforestation
campaign in the United States, a feat not attainable when slower and more
expensive manual labour was employed.[4]

3.
Farmers are also using drones equipped with
multispectral and hyperspectral technology (imaging technologies used to
clearly define targeted objects) to detect and treat farm areas infested with pests,
weeds and diseases. The use of drones in spraying farms to combat infestations
also helps in reducing the risks associated with exposure from handling
pesticides. Furthermore, with the data generated from drone flights over farms,
farmers are not only notified of the mere presence of maleficent infestations, but
are also armed with the requisite data to determine uncertainties like the
appropriate quantity of pesticides to use, proper cost estimations of
pesticides required for treatment etcetera.

4.
The use of drones for crop and livestock
surveillance is perhaps the most innovative application of the technology.
Sensor equipped drones can be used to observe individual plants to access both patent
issues like damage to leaves and latent issues as poor photosynthetic rates.
Amongst grazing livestock, the technology can readily be deployed to identify
sick, lost or injured animals in a faster and more efficient means as opposed
to relying on human inspection efforts.

Nigeria’s
Drone Usage Dilemma: Striking the Balance between National Security and
Innovation.

On the 8^th of May 2016, the NCAA
announced restrictions on the use of drones in Nigeria. Of course in a
democratic society as ours, the regulation of society is desirable to prevent a
descent into chaos or as Thomas Hobbes best put it, “A state of nature where
life was nasty brutish and short.” But popular concern is not with the
regulation of drones, rather it is the difficulty of compliance with the
swingeing restrictions that are unsettling. In relaying the restriction, Sam
Adurogboye, a spokesman of the NCAA stated:

“In recent times, RPA/UAV (Unmanned Aerial
Vehicles) are being deployed for commercial and recreational purposes in the
country without adequate security clearance. Therefore, with the preponderance
of these operations, particularly in a non-segregated airspace, there has to be
proactive safety guidelines.”

Pursuant to the restriction, the agency went
ahead to issue the Guidelines and Requirements for Grant of Permit for Aerial
Aviation Services (PAAS) made pursuant to the Nigerian Civil Aviation Regulations (Nig. CARs 2015 Part 8.8.1.33) and
Implementing Standards (Nig.CARs 2015 Part IS.8.8.1.33) as the pioneer
guideline regulating drone usage in the country. Without further ado, below are
the key excerpts of the above guidelines:

·
Only companies registered with the
Corporate Affairs Commission with a minimum share capital of at least N20,000,000
may make an application for a PAAS. The import of this requirement presupposes
that individuals are excluded from applying for the said permit.

·
The completion of a Personal
History Statement by all shareholders having a 5% equity holding in the
applicant company at the Headquarters of the State Security Service (SSS).

·
Payment of a non-refundable
application fee of N500,000 (five hundred thousand naira) to the Nigerian Civil
Aviation Authority (NCAA).

·
A waiting period of 6months for the
issuance of a licence/permit from the Airport Transport Licensing Committee of
the NCAA.

Indeed, a major consequence of the NCAA
guidelines on agriculture in Nigeria is obviously the untold hardship it would
occasion on farmers intending to deploy drone technologies on their farms. For
instance, consider how many farmers in Nigeria can afford to incorporate an
agro company with a share capital of N 20,000,000? This rhetoric is gloomier
upon the realization that 70% of farmers in the nation are predominantly
subsistent farmers with barely enough resources to only farm and feed their
selves and families.

Nonetheless, the fears of Nigerian
authorities cannot be discountenanced considering the reality that when in the
wrong hands, drones can be utilised to achieve negative ends and indeed
constitute serious security challenges in societies. Considering that the
nation is plagued by a legion of security threats, the government’s strict
stance can be understood. In reinforcing the position of the NCAA and further articulating
the government’s position on drone usage in the country, the National Security
Adviser, Maj-Gen. Babagana Monguno (rtd.) in October 2018 stated[5]:

“Members of the public are sternly warned
against illicit acquisition of controlled items such as firearms, remotely
piloted aircraft (Drones) and broadcast equipment amongst others. Accordingly,
those with such illegally acquired controlled items are hereby advised to
voluntarily surrender them to the appropriate security agencies.”

The Way
Forward

It is suggested here that the appropriate
approach to be adopted by relevant authorities in engaging emerging trends,
technology and indeed all novelty should not be abrupt bans or grim
restrictions but constructive researches and consultations to ascertain the
pros and cons of such. This is what is expected in any democratic and
progressive society. For example, the European Union before the passage of its guidelines
regulating drones (and even currently) put in place a platform (online) to
accept all recommendations and suggestions for the effective regulation of the
usage of drones amongst EU member countries.[6]

In a similar vein, Parliament in the UK conducted
open consultations for suggestions on the regulation of Unmanned Aerial
Vehicles, drones, in the country[7].
The consultations saw over 5,000 recommendations made to the UK parliament and
has ultimately culminated in the Air Traffic Management and Unmanned Aircraft
Bill on the floor of parliament.

Conclusively it is germane to note that in
order for Nigeria to benefit from the boundless potentials that abound in the
application of drone technology to Agriculture it must review the current
draconian guidelines regulating drone flights in the country. Nigeria must have
a reorientation targeted at changing its approaches to emerging trends as
failure to do so would leave the country as one always playing catch-up to its
contemporaries.

Author:

Echoga Caleb is an associate at Omaplex Law
Firm, with years of experience in Technology, Data protection and Litigation.

caleb.echoga@omaplex.com.ng

[1] Journal of African Elephants, ‘Tanzania Reinforces Anti-Poaching Efforts’ < https://africanelephantjournal.com/tanzania-reinforces-anti-poaching-efforts/>
Accessed 23^rdNovember,
2020.

[2] Matt Mcfarland, ‘Airports Scramble to Handle Drone Incidents’ BBC (Washington
DC, 5 March 2019) < https://edition.cnn.com/2019/03/05/tech/airports-drones/index.html>
Accessed 23^rdNovember, 2020.

[3] BBC, ‘ Gang Who Flew Drones Carrying Drugs into Prisons Jailed’ BBC ( England, 15 March 2018) < https://www.bbc.com/news/uk-england-43413134>
Accessed 23^rdNovember, 2020.

[4] Isabella Lee, ‘Drones for
Good: DroneSeed Uses Drones in Post-Wildfire Re-planting Project’ < https://uavcoach.com/droneseed/
> Accessed 23^rdNovember, 2020.

[5] Premium Times, ‘Nigerian
Govt Bans Unauthorised Use of Drones, Broadcast Equipment’ Premium Times (Abuja, 25 October, 2018) <https://www.premiumtimesng.com/news/top-news/292569-nigerian-govt-bans-unauthorised-use-of-drones-broadcast-equipment.html
> Accessed 25 November, 2020.

[6] European Union, ‘Public
Consultation On Drones (Unmanned Aircraft) – Technical Standards For Drones As
A Product And Conditions For Drone Operations’ <https://ec.europa.eu/info/consultations/2018-drones_en
> Accessed 25 November, 2020.

[7] Sean Daly, ‘UK: New C-Drone
Measures Announced; In Parliament, Transport Minister Calls For Life Sentence
For Gatwick Drone Pilot’ < https://c-drone-review.news/en/2019/01/11/uk-new-c-drone-measures-announced-in-parliament-transport-minister-calls-for-life-sentence-for-gatwick-drone-pilot/
> Accessed 25 November, 2020.

Register For The Digital Strategy Workshop For Lawyers

by Legalnaija | Jan 15, 2021 | Uncategorized

The world is becoming more
digital, and the legal sector is no different. To compete in an
increasingly technological world, today’s lawyers must learn and hone essential
digital skills in order to get more clients, increase visibility, and grow their
legal practice. If you will like to be one of the lawyers using digital media
to get ahead of the competition, we humbly invite you to register for the Digital
Skills Training for Lawyers workshop.

The training will equip participants with the skills and tools needed to
develop and implement a high-growth online strategy and position your business
for profit now and in the long run.

Kindly note the following details about the
training;

·
Theme: “Digital
Strategy Workshop For Lawyers”

·
Modules:

–
SEO and
Conversational Tools

–
Social
Media Management

–
Professional
Branding

–
Business
Strategy

·
Members
of Faculty:

–
Akinyemi Ayinuoluwa, Partner, Hightower Solicitors

–
Adebimpe Mosanya, Lead Consultant, Beetee Consulting

–
Adedunmade Onibokun, Partner, AOC Legal

–
Stephanie Etiaka, Brand Communications Expert, OAL Nigeria

·
Date:
18^th and 19th of February, 2021

·
Time:
11am – 2pm daily

·
Venue: Virtual

·
Audience:
Lawyers

·
Aims
& Objectives: To train lawyers on how they may take advantage of online and
digital media resources to promote their legal practice and careers.

Registration Details

Fee
per delegate – N20,000

Account Details –

Lawlexis
International Limited

Fidelity
Bank

4011176564

Registration Link –

http://bit.ly/lawdigitalworkshop

Kindly note that all payment confirmation and
delegate information should be sent to lawlexisinternational@gmail.com.
For contact and sponsorship details, please contact Lawlexis on 09029755663.

COVID-19: NBA Ado-Ekiti Holds First Virtual Statutory Meeting.

by Legalnaija | Jan 14, 2021 | Uncategorized

The Nigerian Bar Association (NBA) Ado-Ekiti Branch* today 14 January 2021, held her first ever virtual Statutory Meeting to commence the New Year.

This was as physical attendance at the meeting was restricted to members of the Executive and January Birthday Celebrants.

This development was in compliance with the Ekiti State Government directives as regards COVID-19 restrictions and regulations.

Signed
Adetutu Oluwaseyi
Publicity Secretary

Hire A Social Media Manager For Your Law Practice

by Legalnaija | Jan 12, 2021 | Uncategorized

With the high rate of
internet penetration in the country and the growing use of social media. Every
business must aggressively employ the use of social media to reach its targeted
audience and market.

For lawyers, social media is
not just a place to show off your thought leadership. It can also be a
crucial place to engage with your potential clients. As law firms and lawyers
directly communicate with the communities they serve, social media also becomes
a natural way to reach people in need and acquire new clients.

At Lawlexis, we are best
suited to help you accomplish all your digital marketing goals for your law
firm or legal practice.

Contact
us for free consultation via –

Lawlexis

Lawlexisinternational@gmail.com

09029755663

Looking forward to helping
you use social media to accomplish your corporate and personal branding
goals.

Book Alert: International Arbitration Law & Practice: The Practitioners Perspective

by Legalnaija | Jan 5, 2021 | Uncategorized

“The International Arbitration Law & Practice: The Practitioners Perspective” is one book every arbitration practitioner or student should have.

The Book is a compendium of scholarly papers that focus on contemporary topics which will deepen the practice of arbitration; whether at a junior or mid-Senior level.

The book which is edited by Tolu Aderemi, Partner, Perchstone & Graeys, is also a compilation of articles by seasoned international arbitration practitioners from both within and outside the Nigerian legal jurisdiction including very eminently qualified and senior Arbitration practitioners such as Kamal Shah (UK), Funke Adekoya SAN, Dr. Babatunde Ajibade, SAN, Adedoyin Rhodes-Vivour SAN, Hon. Justice Nnamdi Dimgba, Tunde Fagbohunlu SAN, Osaro Eghobamien SAN, BOLAJI AYORINDE SAN, FCArb., O.F.R., Bode Olanipekun, SAN, Tunde Busari, SAN, FCIS, FCIArb, @Ikponwosa Omigie (Company Secretary, NAPIMS),Prof Alero Akeredolu, Funmi Roberts and Prof Olawuyi.

This Book is a valuable resource tool for Arbitration Practitioners and is a welcome contribution to the body of knowledge on the topic in Nigeria.

Order your copy via the link below –

https://flutterwave.com/store/lawlexis/zwxp0jf6jlm0

Cost – #10,000

Or call 09029755663 or mail Lawlexisinternational@gmail.com

Jurisdiction of the National Industrial Court over Service Conditions in the Military | Michael Dugeri

by Legalnaija | Dec 28, 2020 | Uncategorized

Introduction

Case law authority is that the National Industrial Court of
Nigeria (NIC) has jurisdiction over service conditions in the military but only
upon fulfillment of prescribed condition precedents. This means that when a
dispute arises over service conditions in the military there is a multi-tier
dispute resolution procedure that requires the aggrieved soldier, rating or
aircraftman and officer to undertake certain steps in an attempt to settle the
dispute internally before resorting to court action. It is important to note the binding
nature of the multi-tier dispute resolution procedure in the military; whether
it constitutes jurisdictional condition precedent to the commencement of action
at the NIC, and the consequences of a party’s failure to comply.

Redress of Complaints in the Military

Section 178 (1) of the Armed Forces
Act, Chapter A20 Laws of the
Federation of Nigeria 2004, provides that if an officer thinks
himself wronged in any matter by a superior officer or authority and on
application to his commanding officer does not obtain the redress to which he
thinks he is entitled, he may make a complaint with respect to that matter to
the Armed Forces Council. A similar procedure is provided under section 179 of
the Act for lower rank officials, that is, a soldier, rating or aircraftman.

Where a Complaint is brought under
these provisions, it is to be resolved within three months of the complaint.
The initial complaint is to be Commanding Officer of the aggrieved officer. A
further right to appeal lies to the Armed Forces Council. In the case of junior
officials however, a further right of appeal lies to any Army, Naval or Air
Force officer under whom the complainant is for the time being serving, being
an officer not below the rank of brigadier or corresponding rank.

Sub-section (3) provides that an
officer who feels he has been wronged in any matter shall first exhaust the
administrative remedies available to him under the provision above before
embarking on any other action. Sub-section (5) states that no officer is to be penalized
or victimized for bringing a complaint in accordance with the Act “if the
complaint does not contravene a provision of this Act”. This implies that
non-compliance with the provision of the Act will not only invalidate the complaint,
it will also constitute a punishable offence under the Act. It is suggested
that non-compliance should only invalidate a complaint without more.

Case law authorities

The courts have held in
the cases of Lt. Col. Garba v. Nigerian
Army & Others (Suit No. NICN/LA/611/2016) and Col. Ositadinma Uche Nwankwo (RTD) v. Nigerian Army & 7 Others (Suit
No. NICN/ABJ/317/2016) that an aggrieved military service official must first
exhaust the administrative remedies provided under the Armed Forces Act before
approaching the NIC. Sections 178 and 179 of the Armed Forces Act, Cap. A20 LFN
2004 provides
that a soldier, rating or aircraftman who thinks himself wronged in any matter
by a fellow serviceman or authority shall
first seek redress from his commanding officer.
Where the complainant is an ‘officer’ and is not satisfied with the
decision of the commanding officer, a further right of appeal is available to
him with respect to the matter to the Forces Council. What it means is that the
NIC will only be able to assume jurisdiction in the matter after the
administrative remedies in the Armed Forces Act are shown to be have been
exhausted.

In the case of Lt. Col. Garba v. Nigerian Army & Others,
the claimant, a Lieutenant Colonel in the Nigeria Army, sued his employer
(Nigeria Army) and other relevant constituted authorities in the Nigeria Army.
He contended that by a notification of retirement dated 2nd November 2014, the
Nigeria Army (sued as the 1st defendant) notified him that he will be due for retirement
on 31st May 2015. He was then offered to apply for voluntary retirement to the
Office of the Chief of Army Staff (sued as 2^nd defendant) not later
than 31st December 2014 so that the 1st defendant may not consider him for
compulsory retirement. He was then directed to proceed on terminal leave by
28th February 2015. The last sentence of paragraph 2 of the letter of
notification of retirement of 21st November 2014 stated thus: “Please note that
your disengagement from Service is subject to the approval of the Army
Council”.

The claimant, by a
letter dated 19^th December 2014, accepted the offer and applied for
voluntary retirement due to failure of Promotional Board 3/2014 examination as
he was earlier directed. The 2nd defendant, by a letter dated 29th December
2014, forwarded the claimant’s application for voluntary retirement to the Army
Headquarters Department of Military Secretary Departments for further necessary
action. Specifically, the letter stated thus: “I am directed to respectfully forward a copy of Reference A on
subject in respect of the above named officer for your necessary action,
please”. There was no evidence before the court, other than mere averments,
that the 2nd defendant accepted the claimant’s application for voluntary
retirement as the claimant pleaded. Also, the 2^nd defendant (as
contended by the claimant) did not issue the claimant with a certificate of retirement; nor was he paid any of his retirements
entitlements. Instead, by a letter of 1st June 2015 the 2^nd
defendant approved the suspension of the claimant’s retirement, ‘until investigation
involving the claimant, Chisco Transport Limited and the Nigerian Army is
concluded.’ This action was premised on section 43(a) of the Armed Forces Act.

The Court, in Lt. Col. Garba’s case, held that the
claimant was a military officer at the time of institution of the case. As a
result, the claimant was a person subject to service law governed by the
Nigerian Armed Forces Act, Cap. A20 LFN 2004. The court further held that the
claimant’s retirement notice from the Nigerian Army was effectively suspended
in accordance with section 43(a) of the Armed Forces Act Cap. A20 LFN 2004,
hence he was not issued with a mandatory
Certificate of Retirement which could have formed the basis of retirement in the
Nigerian Armed Forces.

Notably, the court
emphasized that section 178 of the Armed Forces Act aforesaid provides ample
channel of administrative remedies for any alleged wrong done to any officer in
the service of the Nigerian Armed Forces which requires as part of service
discipline, to be exhausted before an officer can seek redress or embark in any
other action including seeking redress in court. In the end, the case of the
claimant failed because as an officer of the Nigerian Army he failed to comply
with the relevant provisions of the Armed Forces Act before bringing the case
before the court (NIC). The court, in the case of Col. Ositadinma Uche Nwankwo (RTD) held that fulfilling the
requirements of section 178 is mandatory and admits of no exception; as such
any failure will render the suit incompetent.

It is pertinent to note
earlier Court of Appeal decisions on the mandatory nature of compliance with
section 178 of the Armed Forces Act. In the case of Major General Ovo Adhekegba v. The Honourable Minister of Defence &
Others (2013) LPELR – 20154, the court held that “The wordings of Section 178, with particular reference to subsections
(1) and (2) are quite clear and unambiguous. An aggrieved officer must first
complain to his superior officer and if still unsatisfied, he then complains to
the ‘Forces Council’”. In fact, the case of Wing Commander Yusuf Garba Mshelia v. Nigerian Air Force & Another (2014)
LPELR – 23732 went the extra mile to hold that the duty enjoined under section
178 is one that is not only imposed on the officer but also one imposed on the
Forces Council itself. Thus in the words of the Court of Appeal:

The
refusal of the Forces Council to respond to the letter for redress by the
appellant is condemned. The law imposed a duty on it, to consider the
complaint, investigate it and grant the necessary redress if any. Its failure
to act is a dereliction of that duty. The Armed Forces as a body, is supposed
to be exemplary, in discipline, the world over. To violate the law and retire a
member of that body in consequence is not an exhibition of discipline or
exemplary conduct. To refuse to act in accordance with section 178 of the Armed
Forces Act 2004, and to continue to keep the appellant in suspense, is an abuse
of office, calculated at denying the appellant the right to seek redress in a
court of law…

Conclusion

The
NIC is now firmly established as a specialized tribunal with exclusive
adjudicating power on matters relating to or connected with labour and
industrial relations laws. However, the
law is settled that where a party fails to satisfy a condition precedent to the
institution of an action, the action instituted by a party is premature and
consequently incompetent. See Omaliko v.
Awachie (2002) 12 NWLR (Pt. 780) 1. It is only logical that the remedy
prescribed by law must be exhausted before recourse to the law court. See also Ajibi v. Olaewe (2003) 8 NWLR (Pt. 822)
237. It is important to note the binding nature of the multi-tier dispute
resolution procedure in the military; whether it constitutes jurisdictional
condition precedent to the commencement of action at the NIC, and the
consequences of a party’s failure to comply.

Michael Dugeri

Lawlexis: We Manage Social Media Accounts For Lawyers And Law Firms

by Legalnaija | Dec 21, 2020 | Uncategorized

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Can the President Disobey National Assembly Summons? – Nonso Anyasi

by Legalnaija | Dec 15, 2020 | Uncategorized

It
has now become a quadrennial occurrence for the Nigerian polity to experience
debates on the constitutionality or otherwise of the President’s disobedience
to summons/invitation by the National Assembly to account for executive
actions/inactions. This debate largely
arises from the perceived conflict between the provisions of Sections 67(1) and
89 of the Constitution of the Federal Republic of Nigeria 1999 (as
amended).

Ideally,
a country governed by responsible leaders would not put its citizen through the
unnecessary venture of indulging in such constitutional debate, because an
invitation by the apex legislative house should not be treated with levity by
the President, but be rather obeyed out of respect to the sovereign will of the
people. This debate has once again become very necessary given the refusal of
President Muhammadu Buhari – on the advice of his Attorney General- to honour
and obey an invitation by the National Assembly to come account for some
executive decisions and actions.

It
is necessary to clarify from the onset that any debate which involves the
interpretation of the sacrosanct provisions of our precious and organic
Constitution can never be otiose, moot or academic, but such debates contain
live issues that can (and should) be examined by the Courts (and legal
scholars) at any time. Please see the case of ARDO v INEC (2017) LPELR-41919 (SC).

Thus,
proponents of the school of thought (led by the Honourable Attorney General of
the Federation) who subscribe to the opinion that President cannot be summoned
or compelled to attend a joint sitting of National Assembly, or of either House
of the National Assembly; or that the President has a constitutional right to
refuse to honour such invitation where issued, hinge their arguments on the
provisions of Section 67(1) of then Constitution which provides thus:

“The President MAY attend any joint meeting of
the National Assembly or any meeting of either House of the National Assembly,
either to deliver an address on national affairs, including fiscal measures or
to make such statement on the policy of government as he considers to be of
national importance.” (underlining
and capitalization mine for emphasis).

This
School of thought subscribe to the view that the use of the modal verb MAY in
this section confers a discretion on the President, which he could choose not
to exercise. However, this invokes the question; does the use of the word “may”
in a statute or the Constitution indeed confer a discretion? Or can it be
interpreted as being mandatory? The Court of Appeal acknowledged this
jurisprudential dilemma in the case of AROWOSAYE
V OGEDENGBE (2008) LPELR-3701 (CA) when the Noble Lord Chima Centus Nweze
JCA (as he then was, now JSC), held as follows:

“The interpretation
of the word “may” has always posed some difficulties. In some circumstances,
the word has been held to import discretion. However, in other circumstances, it has been held to be mandatory.”
(underlining mine for emphasis).

In
the case of UDE V NWARA & ANOR
(1993) LPELR-3289 (SC) the Apex Court laid down the law that the use of the
word “may” in a legislation should be construed as mandatory when it imposes a
duty on a public official. The Apex Court held as follows:

“I agree with Chief
Umeadi that although Section 28(1) of the Law states that the lessor “may enter
a suit”, “may” should be construed as
mandatory i.e. as meaning “shall” or “must. I believe that it is now the
invariable practice of the Courts to interpret “may” as mandatory whenever it
is used to impose a duty upon a public functionary the benefit of which enures
to a private citizen.” (underlining mine for emphasis).

Therefore,
this writer submits that any argument that attempts to excuse the President’s
disobedience to National Assembly invitations by virtue of the purported
discretion conferred on him in Section 67(1) of the Constitution is not pure or
absolute, but is rather standing on a shaky and greatly contested legal
foundation as the modal verb “may” can be construed to connote compulsion to
perform an act and not discretion.

Furthermore,
there is the fundamental prescription that in the interpretation of the
provisions of the Constitution, Sections of the Constitutions must be construed
holistically and not in isolation (Please see the case of A.G FEDERATION V ABUBAKAR (2007) All FWLR (Pt. 389) 1264, 1289 -1291).
Also, the Courts (and indeed officers of the Courts including the Honourable
Attorney General of the Federation) must interpret the Constitution in such a
way that the elementary principles of Government are upheld (Please see the
case of SARAKI V FRN (2016) 3 NWLR (PT
1500) 531, 631 -632). The Constitution must never be interpreted in any
manner that would do violence to the fundamental principles upon which our
democracy is built. Please see the case of DAPIANLONG
V DARIYE (2007) 8 NWLR (PT. 1036) 239).

Therefore,
what are the fundamental principles of government upon which our Constitution
is based that must guide an interpreter of the Constitution? Our 1999
Constitution is premised upon the governmental principles and ideals of democracy,
federalism, separation of powers and checks and balances. The provisions of
Chapter 1 of the Constitution emphasizes these underlying principles which form
the rubric of the administration of this Country. Any attempt to interpret the
provisions of the Constitution must be done in such a manner that gives effect
to these underlying principles. Any purported interpretation that does violence
to these principles are untenable and null. Please see the case of SKYE BANK V IWU (2017) LPELR-42595 (SC).

Therefore,
in construing the provisions of Section 67(1) of the Constitution, one needs to
examine the provisions of other Sections of the Constitution which can be
interpreted together with it to unravel the intention of the framers of the
Constitution. It is clear that from the ipsissima
verba of that section, the President does not need the invitation of the
legislature before he exercises his powers under this Section. This writer
submits that the purpose of this Section 67(1) of the Constitution is to give a
constant access to the President to address either or both houses of the
National Assembly even without the invitation of the National Assembly, and not
necessarily to confer a discretion on the President to refrain from attending
sessions of the legislation where necessary.

It
is trite that the draftsperson of any legislation does not use words
extravagantly. Every single word in a legislation has its purpose. This writer
submits that the closing phrase of Section 67(1) of the Constitution lends
further credence to the interpretation that this Section only serves to confer
an open and constant access on the President to attend National Assembly
sittings when the President so desires. The said subsection ends with the
clause “…as he considers to be of
national importance.”

It
is clear that it is the President who has the authority to determine what is of
national importance that warrants his visitation to the National Assembly. The
power conferred on the President in this Section can only be exercised for the
purposes stated in this section and cannot extend to cover other purposes. The
President needs not wait for an invitation from the federal legislative body
before exercising this Section 67(1) power.

The
National Assembly on the other hand has been given the powers to investigate
the conduct of affairs of any person or authority charged with the duty of
administration. Please see Section 88(1)(b) of the Constitution. Section 89 of
the Constitution further gives the National Assembly the powers to summon any
person to appear before it to give evidence in respect of such investigation. Section
88(1)(b) of the Constitution provides that each House of the National Assembly
shall have the power to direct an investigation into the conduct or affairs of
any person, authority, Ministry of government charged with the duty of
executing or administering laws enacted by the National Assembly.

The
Constitution unequivocally provides in Section 5 of the Constitution that the
executive powers of the Federation shall be vested in the President and may be
exercised directly by him and shall extend to the execution and maintenance of
this Constitution as well as all laws made by the National Assembly.

A
community reading of the provisions of Sections 5, 67, 88 and 89 of the
Constitution shows the intentions of the draftsperson of the Constitution to
infuse the principle of checks and balances in the administration of the
Country. The President is the head of the executive arm of government. He is
the number one person charged with the administration of the laws of the
Federation. The Provisions of Section 88 of the Constitution shows the clear
intention of the draftsperson of the Constitution to subject the exercise of
executive powers under Section 5 of the Constitution to checks, investigations
and balances by the National Assembly.

This
is the fundamental principle upon which our Constitution is built. The principle
of checks and balances is infused in our system of government and the Courts
have always acknowledged this principle. In the case of GOVERNOR OF EKITI STATE V OLAYEMI (2016) 4 NWLR (PT. 1501) 1 @ PP.
41-42 (PARAS. G-A) RATIO 12, the Court of Appeal held thus:

“The Constitution of
the Federal Republic of Nigeria, 1999 (as amended), despite of its recognition
of the doctrine of separation of powers, has expressly made provisions for the
legislature to exercise limited oversight functions in relation to the
executive at both the Federal and State levels. So the concept and application
of the concept of separation of powers under the Constitution does not give
each arm of government the liberty to act without being subject to any
restraint or check by another arm of government.”

This
writer submits that the powers donated to the National Assembly under Section
88 and 89 of the Constitution is in conformity with this principle of checks
and balances which operates as an limitation to the fundamental doctrine of
separation of powers.

Admittedly,
the President enjoys constitutional immunity under Section 308 of the
Constitution and cannot be arrested or compelled to attend the proceedings of
any Court. Likewise, no civil or criminal proceedings shall lie against the
President in his personal capacity during his tenure. However, the National
Assembly is not a Court, it is a distinct arm of Government that derives its
powers directly from the Constitution. The investigative powers conferred on
the National Assembly by virtue of Section 88 of the Constitution does not
elevate the National Assembly into the status of a Court. The Courts belong to
Judicial arm of Government while the National Assembly belongs to the
Legislative arm of Government. Therefore, this writer submits that the provisions
of Section 308 of the Constitution shall apply only to the extent that the
President cannot and shall not be arrested by the security forces during his
presidency. However, this does not confer a blanket immunity on the President
to refrain from attending National Assembly summons and proceedings.

I
have submitted so much in this article. It is perhaps neater and tidier if I
summarize by way of recapitulation as follows:

a.
The President has the
powers to attend the any or the joint houses of the National Assembly at any
time to deliver an address on national affairs on fiscal issues and
governmental policy as he considers of national importance. The President does
not need an invitation from any of the legislative house to exercise this
power.

b.
The National Assembly
has the powers to investigate and invite or summon any member of the executive
including the President to account for the execution and administration of the
country and the laws of the land.

c.
The President does
not have any discretion to exercise when he is summoned by the National
Assembly to answer questions relating to the administration of the Country. He
is bound by his oath of office and the sovereign will of the people to honour
such invitation.

d.
The provisions of
Section 308 of the Constitution does not grant the President any immunity to
refrain from giving testimony before the National Assembly or answering any
questions in respect of any investigation thereat.

e. The President cannot be arrested by the Police of the
Security forces for any reason whatsoever. However, if he fails to honour a
summons to appear before the National Assembly, the National Assembly can
commence impeachment proceedings against him as such act amounts to gross misconduct
as defined by the learned jurist Niki Tobi JSC in the case of INAKOJU V. ADELEKE (2007) 4 NWLR (Pt 1025) 423.

Force Majeure vs. Frustration: The Clear Difference | Deola Osifeko

by Legalnaija | Dec 15, 2020 | Uncategorized

Usually contracts not only spell out rights
and obligations of parties, it defines the scope of the legal or commercial
relationship as well as anticipates unforeseen situations (like we have
experienced and are still experiencing the effect of the outbreak of Covid19
which has not only altered daily living but how we discharge our duties in the
workplace and other legal/commercial arrangements).

Specific contract provisions like the
principle of force majeure and the doctrine of frustration may be invoked to
mitigate liability arising from a breach. While the former is the creation of
contract the latter is the creation of common law.

It is therefore safe to include force
majeure clauses in contracts. Force majeure refers to a clause
that is included in contracts to remove liability for
natural and unavoidable catastrophes that interrupt the expected course of
events and prevent participants from fulfilling contractual obligations. The
effect of such a clause is that it contemplates extraneous business risks
occasioned by future events which are beyond the control of any party to the
contract, affecting the parties from discharging same and providing a flexible
approach on how parties manage the situation.

Therefore, a party affected by outbreak of
disease (epidemic, pandemic), war, riot or natural disaster (Act of God) can
invoke the force majeure clause to avoid liability for default that will result
in breach of contract i.e the failure of performing obligations of the contract
arising from the unforeseen event.

A well written force majeure clause must
provide for:

– A range of events that triggers the non
performance of the contract

– The impact of the effect when the
clause is invoked

– The impact of such invocation on
parties contractual obligations

On the other hand common law envisages that a
contract may be discharged or set aside on the ground of frustration i.e
when an unforeseen event interferes with the capacity of the parties to fulfill
contractual obligations. It therefore implies that a contract may be frustrated
where due to supervening events, parties are unable to substantially perform
their obligations as anticipated in the contract. (Note that the presence of a
force majeure clause and frustration clause in one and the same contract
renders the frustration clause ineffective i.e displaces the frustration
clause).

A supervening event is an event that occurs:

a. After the formation
of the contract

b. Without its inclusion
in the provisions of the contract and

c. In absence of
anything either party is capable of doing by way of a fault or default or
anticipatory acts

d. When the nature of
the contractual rights and obligations is substantially altered or interfered
with such that:

· Performance
of the contract has become impossible

· The
contract is now totally different from what the parties intended

· A
fundamental contractual term has become incapable of being performed.

However, where a force majeure clause
displaces the effect of the doctrine of frustration in a contract: for events
within the force majeure clause, a party can argue frustration for any event
beyond the scope of the force majeure clause and the court may grant an order
in favour of such argument.

The striking difference between a force
majeure clause and frustration apart from the fact that the former is a
creation of contract is that parties may choose to resume or defer their rights
and obligations after the supervening event is over while in the case of
frustration, parties are discharged from rights and obligation arising from the
contract although any partial performance must either be compensated or partial
payment recovered.

Adeola Osifeko

Corporate Commercial and Dispute Specialist

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