Nigeria
In your jurisdiction, are there any formal ADR procedures available for resolving commercial disputes other than litigating (or arbitrating) to a final hearing?
In Nigeria, there are several forms of ADR mechanisms available for the resolution of commercial disputes, including mediation, conciliation, negotiation, mini-trial, arbitration, and med-arb.
Mediation is a process by which a neutral and impartial third party, called the mediator, is invited by the disputing parties to facilitate the resolution of the dispute. The mediator facilitates communication, promotes understanding, focuses the parties on their interests and employs creative problem-solving techniques to enable the parties to reach their own mutual settlement/agreement. Both parties jointly procure the mediator, and the process is voluntary as the parties are not under an obligation to accept the suggestions of the mediator. In some States in Nigeria, litigants are directed by the courts to explore the settlement of their disputes through mediation. To foster the swift and easy resolution of disputes through mediation, these States have set up Multi-Door Courts. The Multi-Door Courts receive cases from the normal courts or from parties directly. Where the dispute is referred to the Multi-Door Courts by the normal courts, the agreement reached by the parties and facilitated by the mediator is returned to the court and this is entered as the judgement of the court.
Negotiation is a problem-solving process by which the parties to a conflict or an imminent conflict voluntarily come together either personally or by their representatives to discuss their differences and attempt to reach a joint decision or resolution of the conflict, on their own and without the involvement of a third party.
Mini-trial is a form of evaluative mediation, which is a non-binding ADR process. It assists the parties to a dispute to gain a better understanding of the issues in dispute, and so enables them to enter into settlement negotiation on a more informal basis.
Med-Arb: This is a two-step dispute resolution process involving both mediation and arbitration. In Med-Arb, parties attempt to resolve their differences through mediation, and if mediation fails to resolve some or all the areas of dispute, the remaining issues are automatically submitted to arbitration.
Conciliation is a procedure where a third party known as the conciliator is appointed to help settle the dispute by persuading both parties to reach an agreement. The conciliator will play an advisory role and may intervene to offer feasible solutions to both parties and help settle their disputes.
Does engaging in ADR have any effect on potential or existing litigation or arbitration?
Generally, engaging in ADR does not have any effect on potential or existing litigation proceedings or arbitration. However, a party to an ongoing litigation proceeding may apply to the Court for a stay of the proceedings, pending the outcome of an ADR mechanism or arbitration. However under the Arbitration and Mediation Act of 2023 (AMA), when mediation proceedings commence in Nigeria, the running of the limitation period for the claim that is the subject matter of the mediation is suspended.
Is ADR compulsory and if so are there any consequences if a party fails to engage in ADR? If it is not compulsory are there any plans for this to change?
No, and there are no plans to make the employment of ADR compulsory in Nigeria. However, it is not unusual in Nigeria, for courts to enquire with the parties, if they would be willing to consider the settlement of their dispute outside of the court system. Where parties agree to consider the resolution of their disputes outside the court system, the court may transfer the matter to the Multi-Door Court House. This is a service provided by many States in Nigeria to settle disputes without recourse to litigation. Multi-Door Court houses are court connected ADR centers which help parties settle disputes through mediation and other types of ADR mechanisms such as mediation, arbitration, Early Neutral Evaluation and other hybrid processes.
Can the parties agree, in advance of any potential dispute, to engage in ADR?
Yes. Parties may in advance, elect to have any potential dispute resolved through any of the ADR mechanisms listed above. It is not unusual for parties to include clauses in their Agreements to employ ADR mechanisms to resolve future disputes. The “arbitration clause” or “mediation clause” within the contract, will specify the preferred ADR mechanism and governing rules. Furthermore, Arbitration being a recognized form of ADR also requires the parties to have agreed to submit any future disputes to an arbitral tribunal. At times, parties may not have agreed to submit future disputes to a tribunal, they may however, by entering into a Submission Agreement or by consensus agree to, submit and or refer current disputes to ADR.
When does ADR generally take place?
ADR generally can take place at any time from pre-issue to appeal provided the parties agree and or submit to it. As ADR is essentially party-driven, ADR is deemed to take place when parties have agreed it has or when it is commenced. Mediation is commenced at the instance of one of the parties by way of application to a mediator, recognized mediation center or Court House and the consequent appointment of a mediator. As concerning Arbitration, it is commenced when one of the parties to the dispute serves on the other party, its Notice of Arbitration.
Is ADR subject to without prejudice privilege and/or confidential? If not, is there any other means to protect confidential information?
Yes. In Nigeria, ADR is generally confidential and will be protected by “without prejudice” privilege. Parties would usually state in their mediation agreements that the mediation proceedings attract “without prejudice” privilege, and consequently, they are not admissible in future proceedings in court or arbitration where the same dispute is commenced. The mediator is equally bound by “without prejudice” privilege. All information shared or discussed during the ADR process is expected to be restricted to the ADR process. However, “without prejudice” privilege does not cover criminal offences disclosed during the ADR proceedings.
Does the output from ADR create precedents?
In Nigeria ADR is private and it does not create a precedent. A settlement achieved through ADR is usually recorded in a written agreement which will be enforceable between the parties. Awards in arbitration are also confidential and private to the parties.
Who bears the costs of ADR?
Generally, the parties share the cost of ADR, albeit it is open to the parties to agree something different as part of the settlement terms.
Is your jurisdiction subject to any specific rules for cross border ADR?
The United Nations Convention on the International Settlement Agreements Resulting from Mediation (Singapore Convention) came into force in Nigeria in May 2024 and is recognized as part of the Arbitration and Mediation Act of 2023 AMA. One of the consequences of this is the codification of mediation practice in Nigeria. Where the enforcement of an international settlement agreement made outside Nigeria is sought, the Singapore Convention applies, provided that the State in question is a party to the convention and the dispute arises from a legal relationship considered commercial under Nigerian laws. This provision extends to written agreements for international commercial mediation, domestic commercial mediation, domestic civil mediation, as well as domestic and international settlement agreements resulting from mediation.
Are there any particularly unusual features of ADR in your jurisdiction that you are aware are different to other jurisdictions?
There is no particular qualification required by a mediator or anyone appointed to manage the ADR Process. However, all ADR procedures are conducted to international standards. In Nigeria, criminal and tax matters cannot be settled using ADR. Certain matters have been recognized by the Supreme Court in Nigeria as not being arbitrable or subject to ADR. These matters include disputes arising out of an illegal contract, disputes relating to change of status/gender, disputes bordering on divorce, tax, disputes relating to gaming or wagering, constitutional matters and bankruptcy.
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