‘Outcome of MSME arbitration is final, legally binding, enforceable’
Chartered Institute of Arbitrators is now working to provide and promote Arbitration and Alternative Dispute Resolution (ADR) mechanisms for Micro, Small and Medium Scale Businesses (MSME’s) in Nigeria in order to help them resolve commercial disputes in Nigeria. In this interview with Joseph Onyekwere, Mrs Doyin Rhodes –Vivour explains the philosophy behind the move.
What does the Chartered Institute of Arbitrators Micro, Small and Medium Scale businesses scheme entail?
The Chartered Institute of Arbitrators (CIArb) Nigeria Branch Micro, Small and Medium Enterprises (MSME) Arbitration Scheme is developed as a means to promote and facilitate access by MSME’s to arbitration and ADR for resolution of commercial disputes. The Scheme provides simple cost effective and timely resolution of disputes and an outcome within 90 days of the appointment of the arbitrator. The outcome is final, legally binding and enforceable. The MSME scheme is applicable for disputes of monetary value between N250, 000 to N5, 000,000 and the arbitrators’ fees have been capped to ensure that the expense does not prevent access to settlement by MSME’s. Benefits of the CIArb MSME Arbitration Scheme include: Dispute resolution by arbitrators trained by the Chartered Institute of Arbitrators the internationally recognized home for arbitrators, minimized fees and pre-determined costs, speed in terms of concluding and award issued within the shortest possible time, minimized formalities, privacy and confidentiality as well as enforceability.
Why do you choose to target MSME’s?
The CIArb Nigeria Branch recognizes the need to build capacity of the Micro, Small and Medium Enterprises; an economic sector, which is the bedrock of economic development. Our institution recognizes the challenges of MSME’s in dispute resolution. Unresolved, protracted disputes or costly disputes could adversely impact on the growth and development of MSME’s. MSME’s are integral parts of the economic fabric of our country and need to be fully aware of alternative means of resolving their business disputes outside the court system. The scheme is in line with the institute’s commitment to making access to alternative means of dispute resolution to a wider category of business owners with reduced costs and quick timelines.
Does Arbitration target only the business community?
The statute that deals with arbitration in Nigeria is the Arbitration and Conciliation Act (ACA) CAP A18 Laws of the Federation of Nigeria 2004. The ACA provides for a unified legal framework for the fair and efficient settlement of commercial disputes by arbitration and conciliation. In this context arbitration applies to settlement of commercial disputes, which largely includes the business community. Section 57(1) of the ACA defines commercial as “all relationships of a commercial nature including any trade transaction for the supply or exchange of goods or services, distribution agreement, commercial representation or agency, factoring, leasing, construction of works, constructing, engineering licensing, investment, financing, banking, insurance, exploitation, agreement or concession, joint venture and other forms of industrial or business co-operation, carriage of goods or passengers by air, sea, rail, or road”. Thus, disputes, which are not commercial in nature, will not be arbitrable under the Arbitration and Conciliation Act. Matters that relate to matrimonial, family proceedings, winding-up of a company, tax etc. are not arbitrable and would be referred to the courts.
How is Institute of Arbitrators working to change the perception of disputants and lawyers about the efficacy of the alternative dispute resolution mechanism in Nigeria?
The perception of users and lawyers in relation to alternative dispute resolution are diverse and includes the following; Users sees litigation as a default for the resolution of disputes, most users and lawyers have limited knowledge on the efficacy of the Alternative Dispute Resolution and there is a perception that arbitration is very expensive.
There is also a view that due to the courts intervention in arbitration and ADR, users may experience delay through extreme formalities. However, understanding the different avenues for dispute resolution that ADR provides (negotiation, mediation, conciliation and arbitration) is the first step in actualizing and building the interest of users and lawyers in ADR as a preferred means for dispute resolution.
For example, Mediation can be said to be even more cost effective than arbitration. Mediation is a non-judicial process in which an independent and impartial third party assists the parties to resolve their disputes. Mediation can effectively resolve a dispute within a relatively short time in situations where parties take part in the process in good faith. The multi-tiered dispute resolution clause, which stipulates negotiations and mediation as prior steps to arbitration can help to save costs and expenses of arbitration. Furthermore, the Institute’s MSME Arbitration Scheme is developed to provide simple, cost effective and timely resolution of disputes of low to medium monetary value before a sole arbitrator. The scheme has specified timelines, a relatively short period within which the whole process is completed and the arbitrator is expected to adopt the simplest procedure tailored to match the dispute in process. This scheme is particularly attractive for small businesses and we encourage all small businesses to contact our schemes committee with a view to keying into the scheme.
The Institute’s emphasis is on education, training and ethics. The Nigeria Branch conducts various training activities in line with its commitment to deliver qualitative training and exposure and enhance the development of a learned society of ADR practitioners. The Institute continues to train the judiciary and other users, different industry segments as well as further educating a wider category of cohorts who wish to understand the techniques of dispute management and avoidance. The Institute organizes specialized training courses for different users including business organizations. Programmes have been conducted for members of the Judiciary and University students. In addition, during the 56th NBA Annual General Conference in Port Harcourt, the Institute conducted the Arbitration Advocacy Training for lawyers. Furthermore the Nigeria Branch introduced non-qualifying programmes such as the Arbitration Workshop Series (an initiative of the Branch aimed at continuous professional development of Arbitrators and Alternative Dispute Resolvers), which is open to attendance by non-members.
For how long has the Chartered Institute of Arbitrators been in Nigeria and what is your membership strength?
The Chartered Institute of Arbitrators Nigeria is the Nigeria Branch of an International not-for-profit charity organization. It is an international recognized home for all alternative dispute resolvers. The institute founded in 1915 continues to play a pivotal role in the training of practitioners in Arbitration/ADR and developing Rules, Ethics and Guidelines thereby impacting greatly on the availability of trained and certified Arbitrators in several jurisdictions of the world. Indeed, I can confidently say that it has achieved its major mission of raising the status of arbitration to the dignity of a distinct and recognized position as one of the learned professions. The Institute was granted Royal Charter in 1979 and has gained international presence in at least 133 countries supported by an international network of 37 branches across all six continents of the world with a global membership of 15,000 members. The Nigeria branch attained branch status in 1999 (19 years) and has strength of 815 members. The Institute’s membership is multi-disciplinary and composed of various disciplines including law, engineering, architecture, banking, finance and estate planning and surveying. There are still some professions that are under-represented particularly in Nigeria and it’s our vision to bring all such professions into our fold. We look forward to welcoming more members particularly from non-legal disciplines, as they are presently under-represented.