THE NATIONAL ALTERNATIVE DISPUTE RESOLUTION REGULATORY COMMISSION BILL: WHY THE NOISE? In recent times, it has become apparent that arbitration and indeed other forms of Alternative Dispute Resolution (ADR) mechanisms have increasingly become the preferred methods of dispute resolution for commercial matters in Nigeria. The number of practitioners engaged in or seeking to engage in the practice of arbitration in the country has increased significantly in recent years and the general attitude towards arbitration in Nigeria at this point can simply be summed up as follows: everyone wants a piece of the action. It will seem that the above summation rings true even with respect to the Nigerian National Assembly. At this point, there is a Bill called the National Alternative Dispute Resolution Regulatory Commission Bill 2011 (The Bill) pending before the Nigerian Senate and of late, the Bill has seemed to gather some momentum in the Assembly, as a prelude to its passage into law. The Bill has generated much debate and furor in ADR circles, particularly amongst arbitration and legal practitioners in Nigeria. Naturally, the question is why? Here are some of the reasons why: THE BILL IS A COLOSSAL WASTE OF SCARCE RESOURCES Section 1(1) provides for the establishment of the National Alternative Dispute Regulatory Commission (The Commission) which has, amongst other things, the following, as part of its functions: a. Advising the Federal and State Governments on the use of alternative dispute resolution
mechanisms; b. The development of an alternative dispute resolution policy for Nigeria; and c. The development and constant review of the rules and regulations for the practice of
Alternative Dispute Resolution in Nigeria. In addition, Section 10(1) of the Bill provides for the establishment of State Alternative Dispute Resolution Centres for EACH state of the Federation, of which there are 36, and the Federal Capital Territory, Abuja. Altogether, the Bill seeks to establish 38 bodies throughout the
Federation of Nigeria for the purpose of carrying out undefined advisory, supervisory and regulatory functions with respect to arbitration in Nigeria. Recent local and international factors have negatively impacted on the fiscal capabilities of Nigeria as a country and as a result, the need for targeted spending and shrewd capital outlay by the Government has, in recent times, not been more apparent. Against this backdrop of presumed fiscal responsibility, it is impossible to see how the cost of maintaining 38 agencies of the Federal Government across 36 states and the Federal Capital Territory, Abuja can be reasonably justified. The passing of this needless Bill into law is sure to put even more strain on a government budget that is already under extreme pressure from, amongst other things, a mismanagement of scarce resources and significant leakages arising from a bloated system. THE COMMISSION AND STATE ALTERNATIVE DISPUTE RESOLUTION CENTRES ARE AGAINST THE SPIRIT OF ARBITRATION The very foundation, upon which the framework of arbitration is built, is the principle of party autonomy. In essence, arbitration arises from the agreement of parties to have their disputes resolved by an independent arbitrator, outside the State’s more coercive dispute resolution framework. This party autonomy principle is reflected in State arbitration legislations across the world, even in Nigeria, for example, through the Arbitration and Conciliation Act as well as the Lagos State Arbitration Law. Bearing this in mind, a look at the Bill makes it clear that the provisions therein are not in line with the foundational principle, or intendment of arbitration. The Bill seeks to regulate by accreditation, all arbitration bodies and institutions. It also seeks to develop and constantly review rules and regulations for the practice of Alternative Dispute Resolution in Nigeria. It is a mystery, what the basis for the accreditation of the arbitration bodies and institutions are. Also, bearing in mind the party-centric nature of arbitration, it is strange that a supposed regulatory body for arbitration will be responsible for arbitration rules and regulations in Nigeria, because in arbitration, it is an elementary principle that generally, parties are at liberty to agree on the applicability of a particular set of arbitration rules to their dispute.
THE VALIDITY OF THE PROPOSED LEGISLATION IN THE FEDERATION IS IN QUESTION Notwithstanding the aforementioned issues, the current provisions of the Bill seem to have been included in complete ignorance of extant laws in Nigeria and as a result, the Act is liable to immediate challenges upon passage into law. Firstly, there is the question of the powers of the National Assembly to purportedly legislate on arbitration on behalf of all of the states in Nigeria. Secondly, there is the question of the potential conflict between Section 7(ix) of the Bill which provides that the Commission shall develop ADR Rules for Nigeria and Article 1 of the First Schedule to the Arbitration and Conciliation Act, which provides for the mandatory application of the Rules in the Schedule to the Act to arbitration in Nigeria. In conclusion, the Bill has been widely criticized and rightly so, it is needless in every sense and also ill timed. With respect to the widely accepted general public policy on arbitration, which is the encouragement and protection of its cardinal principles and its promotion as a means of dispute resolution that is driven by the agreement of parties to arbitration, this Bill is an affront. The enactment of a law like this is certain to undo a lot of the efforts and strides made in recent times that have made Nigeria a more suitable hub for arbitration in Africa. The consequent effect is that other countries with more favourable national arbitration regimes will benefit from Nigeria’s loss, both commercially and otherwise. The National Assembly has made significant steps with respect to bringing this law into being. However, as the saying goes, it is ‘better late than never’, so it is certainly not too late for the National Assembly to right this undoubted wrong, which this law is certain to do to arbitration in Nigeria, by the Assembly scrapping this Bill and consigning it to history.
MOFESOMO TAYO-OYETIBO1
1 Mofesomo Tayo-Oyetibo is of the Commercial Law Practice Group in the Law Firm of Tayo Oyetibo & Co.