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WHAT IS ALTERNATIVE DISPUTE RESOLUTION
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The term “Alternative Dispute Resolution” (ADR), is used generally to describe the methods and procedures used in resolving disputes either as alternatives to the traditional dispute resolution mechanism of the court or in some cases supplementary to such mechanisms. Alternative Dispute Resolution. Any method of resolving disputes without litigation. Abbreviated as ADR. Public courts may be asked to review the validity of ADR methods, but they will rarely overturn ADR decisions and awards if the disputing parties formed a valid contract to abide by them. Arbitration and mediation are the two major forms of ADR
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Alternative Dispute Resolution ("ADR") refers to any means of settling disputes outside of the courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration. As burgeoning court queues, rising costs of litigation, and time delays continue to plague litigants, more states have begun experimenting with ADR programs. Some of these programs are voluntary; others are mandatory.
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While the two most common forms of ADR are arbitration and mediation, negotiation is almost always attempted first to resolve a dispute. It is the preeminent mode of dispute resolution. Negotiation allows the parties to meet in order to settle a dispute. The main advantage of this form of dispute settlement is that it allows the parties themselves to control the process and the solution.
Mediation is also an informal alternative to litigation. Mediators are individuals trained in negotiations, who bring opposing parties together and attempt to work out a settlement or agreement that both parties accept or reject. Mediation is used for a wide gamut of case-types ranging from juvenile felonies to federal government negotiations with Native American Indian tribes. Mediation has also become a significant method for resolving disputes between investors and their stock brokers.
ADR arose largely (as stated earlier) because the litigation process was and still is, unduly expensive- in the long-run and especially prolonged as a result of judicial technicalities embedded in that method of dispute resolution.
Apart from the fact that businessmen and women now prefer private resolution of their disputes to exposure to the machinery available in the glare of the regular courts, there is the advantage that settlement through ADR avoids what can be best described as brinkmanship and acrimony, which often times arise in litigation. It reduces hostility and antagonism; but most importantly, ADR saves business relationships and encourages a continued cordiality between the parties. These are made largely possible because the procedure provides greater room for compromise than litigation.
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METHODS OF DISPUTE SETTLEMENT
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In modern times, litigation which has hitherto been the principal method of resolving commercial disputes is now being complemented by other methods of dispute resolution. Owing to the exigencies of commercial transactions, many countries in the world now apply alternative methods of dispute resolution.
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1. NEGOTIATION
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Negotiation is a process in which two or more parties hold discussions in an attempt to develop agreement on matters of mutual concern. This process of communication which involves the give and take of ideas and mulling over options in an endeavour to find common ground forms the basis of every non-adjudicative dispute resolution procedure.
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Negotiation is an indispensable step in any ADR process as it is consensual to all ADR activities. It is believed to be the most satisfactory method of dispute settlement. It involves the discussions or dealings in a matter with the intention to reconcile differences and establish areas of agreement, settlement or compromise that would be mutually beneficial to the parties. Usually, negotiation consists of a “quid pro quo” of sorts which is the giving up of something in other to get something else in return.
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2. FACILITATION
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When a neutral party enters discussions to help the parties work towards consensus, the process is described as - “facilitated negotiation” or “facilitation”. The “facilitator” does not concentrate on the substance of the issues for discussion. Rather, he or she assists the parties to focus on the salient issues to improve their chances of reaching an agreement.
3. CONCILIATION / MEDIATION
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Conciliation is a method of settling disputes by consensus rather than by adjudication. The Arbitration and conciliation Act (CAP 19- LFN 1990) provides for the right to settle disputes by conciliation. Part II of the Act i.e. Section 37 to 42 and 55 stipulate detailed provisions for conciliation. Section 37 provides that the parties to any agreement may seek amicable settlement of any dispute in relation to the agreement by conciliation under the provisions of the Act. In addition, Section 55 provides that parties to an international commercial agreement may agree in writing that a dispute in relation to the agreement shall be settled by conciliation under the Conciliation Rules set out in the Third Schedule to the Act.
In Nigeria, conciliation and mediation are used interchangeably even for the purpose of the Arbitration and Conciliation Decree No.11 of 1988 (now Cap 19 of the LFN 1990). There is therefore no clear-cut demarcation between conciliation and mediation in Nigeria.
4. Mediation-Arbitration
Mediation-Arbitration is a two-step dispute resolution process involving both mediation and arbitration. In Mediation-Arbitration, parties try to resolve their differences through mediation, where mediation fails to resolve some or all the areas of dispute, the remaining issues are automatically submitted to binding arbitration.
In its traditional form, mediation-arbitration uses a neutral who must be skilled in both procedures, in other to guide parties through the mediation phase and to preside over the arbitration and render a final, binding decision. The final result in a mediation-arbitration combines any agreement reached in the mediation phase with the award in the arbitral.
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In Mediation-Arbitration process, the decision to go to arbitration if mediation is unsuccessful is one to which the parties commit themselves in advance before the process commences.
5. Arbitration
Although, Arbitration has been part of our traditional dispute resolution method in Nigeria, the first statute on Arbitration in Nigeria was the Arbitration Ordinance, 1914 that later became Chapter 13 of the Revised laws of Nigeria, 1958.
With the growing importance of arbitration in the country and as a result of increase in the volume of commercial transactions, the inadequacies of the existing statute became apparent. In order therefore to provide for a more standardized and an all encompassing .
Arbitration law in Nigeria, the Arbitration and Conciliation Decree 11 of 1988 was promulgated and is the subsisting law on Arbitration to date. It has been incorporated as Cap 19- Laws of the Federation of Nigeria 1990.
The Act provides for both domestic and international commercial arbitration and applies only to disputes arising from commercial transactions. It is based on the model Law of Arbitration and incorporates the UNCITRAL Arbitration Rules of 1976 as the first schedule to the Act.
Arbitration is an agreement by the parties that tribunals of their choice settle a dispute arising between them. “The modern arbitral process has lost its earlier simplicity and so has become more complex, more legalistic and more institutionalized. Yet, in its essentials, it has not changed. There is still the original element of two or more parties faced with a dispute, which they cannot resolve by themselves, agreeing that some private individuals would resolve it for them.
Where two or more persons agree that a dispute or potential dispute between them shall be decided in a legally binding way by one or more impartial persons of their choice, in a judicial manner, the agreement is called an arbitration agreement or a submission to arbitration and when after a dispute has arisen, it is put before such person or persons for decision, the procedure is called an arbitration and the decision made is an award.
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ADVANTAGES OF ADR
1. Saving Costs
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Apart from simplicity and expeditiousness of the procedure, costs may be saved where the dispute is a technical one and the ADR neutral is a technically qualified person and/or counsel to the parties are specialists.
2. Quicker Decisions
The ADR tribunal is notably quicker in reaching a decision. Some arbitration rules provide time limits within which to conclude arbitral proceedings; an example are the rules of the Regional Centre Lagos which prescribes a maximum of six months within which to conclude arbitral proceedings. This presupposes that arbitral proceedings at the Centre can take one day or more up to a maximum of six months.
3. Preservation Peace, Good Business and Personal Relations
Where the parties have good business or personal relations which they wish to preserve, it may be advisable to settle their business disputes by ADR which is a more friendly procedure of settling disputes and leaves room for continuation of an unimpaired relationship.
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