INTRODUCTION
Globally, the practice of alternative dispute resolution has become popular with legal practitioners within and outside the court system. A large number of lawyers now offer their services not only in litigation but also in alternative dispute resolution. The term “alternative dispute resolution” (ADR) is generally used to describe the methods and procedures used to resolve disputes either as alternative to the traditional dispute resolution mechanism of the court or in some cases as a supplement to that mechanism.Footnote 1 Thus, ADR refers to all legally recognized options or methods of resolving a dispute outside litigation. Examples of ADR mechanisms include negotiation, mediation, conciliation, arbitration and hybrid processes like med-arb.Footnote 2 ADR mechanisms are not superior to litigation; rather they compliment litigation by offering disputing parties a considerable range of alternatives.Footnote 3 Thus, according to Lord Woolf, “[w]here there exists an appropriate dispute resolution mechanism which is capable of resolving a dispute more economically and efficiently than court proceedings the parties should be encouraged not to commence or pursue proceedings in a court until after they had made use of that mechanism”.Footnote 4
It follows that the adoption of ADR mechanisms for dispute resolution appears to be a viable option where it will be more economical and efficient in resolving a dispute. Nevertheless, there are instances where the adoption of ADR mechanisms will not be legally appropriate or acceptable for dispute resolution.Footnote 5 This article seeks to discuss an ADR mechanism known as “conciliation” and the legal framework relating to its practice in Nigeria. The article is divided into four sections. This introduction gives a general overview of conciliation. The second examines the legal framework relating to the practice of conciliation in Nigeria. Using the UNCITRAL Model Law on International Commercial Conciliation as a normative framework, it analyses the proposed reforms to the existing legal framework for conciliation in Nigeria which are contained in the Nigerian Federal Arbitration and Conciliation Draft Bill and proposes various reforms to the draft bill. The article also investigates the effect of the statutes of limitation on conciliation proceedings. The third section suggests that the institutionalization of conciliation will increase its viability as an ADR mechanism in Nigeria. The fourth section offers a conclusion.
Meaning of conciliation
“Conciliation” is a non-binding dispute resolution mechanism in which a neutral third party known as the conciliator assists disputing parties to settle their differences and achieve reconciliation.Footnote 6 Thus, the conciliator assists the parties to settle their differences and may if necessary deliver a non-binding opinion as to the merits of the dispute; however it has been pointed out that in some contracts the parties may agree that a conciliator's recommendation is binding unless challenged within a stated period.Footnote 7
The terms “conciliation” and “mediation” are usually used interchangeably, although there have been different views on whether these two terms can be used as such.Footnote 8 A preferred definition and usage of “conciliation” and “mediation” is found in article 1(3) of the UNCITRAL Model Law on International Commercial Conciliation (Model Law)Footnote 9 which defines “conciliation” as: “a process whether referred to by the expression ‘conciliation’ ‘mediation’ or any expression of similar import, where the parties require a third party or persons (‘the conciliator’) to assist them in their attempt to reach an amicable settlement of their dispute arising out of or relating to a contractual or other legal relationship. The conciliator does not have the authority to impose upon the parties a solution to the dispute.”
Based on this definition, it follows that “conciliation” and “mediation” can be used interchangeably. For conciliation or mediation to be valid within the scope of this definition, the following elements must exist: the parties in dispute must require or accept the assistance or intervention of a third party in the amicable resolution of their dispute; the third party cannot in any circumstances impose a binding opinion on the parties, with the result that any solution proposed by the third party is only for consideration by the parties; and the resolution of the dispute rests on the agreement of the parties. The objective of conciliation proceedings is therefore that each party should be seen specifically to have accepted the settlement, so that there is no losing party.Footnote 10
Conciliation may be adopted in the resolution of any kind of civil dispute ranging from disputes arising from domestic or international trade and commerce to family, labour and political disputes. Conciliation may also be used in resolving national disputes and even conflicts between nations.Footnote 11 For example, under international law, nations are specifically mandated first to explore ADR options like conciliation before resorting to other means of dispute resolution. In this regard, article 33 of the United Nations Charter directs that: “[t]he parties to any dispute the continuance of which is likely to endanger the maintenance of international peace and security shall first of all seek a solution by … conciliation or other peaceful means of their own choice.”
Recourse to conciliation
Generally, recourse to conciliation may be voluntary, statutory, contractual or court ordered.
Voluntary conciliation
Recourse to conciliation is voluntary where disputing parties, without any prior agreement to refer a dispute to conciliation, voluntarily invite or accept the assistance or intervention of a third party in resolving their dispute. Thus, where there was no conciliation agreement between parties because a dispute was never contemplated and a dispute has arisen, the disputing parties may voluntarily agree that the dispute should be settled through conciliation. An example of such a situation is where a dispute between parties is caused as a result of an unforeseen event like an accident.
Statutory conciliation
A law may stipulate that disputes within certain sectors of the economy or government should first be referred to conciliation. In such situations, recourse to conciliation consequently becomes a condition precedent to any action. The parties are compelled by statute to conciliate and it will be unlawful for them to pursue any other course of action until the option of conciliation has been explored. This is usually the case with labour or trade disputes.Footnote 12
Contractual conciliation
Where parties stipulate in a contract that any dispute arising from the contract shall be referred to conciliation, then recourse to conciliation will be deemed to be contractual. In such situations recourse may not be had to arbitration or litigation unless conciliation is unsuccessful.
Court ordered conciliation
A court of law may compel a disputant to conciliate before exploring any other legal alternative to resolve the dispute. For instance, where a party to an agreement to conciliate a dispute refuses to honour that agreement, the other party can apply to a court of law to compel the defaulting party to abide by the agreement to conciliate. Where this occurs, it is likely that the court will grant an order compelling the recalcitrant party to conciliate unless there are legally justifiable reasons to the contrary.Footnote 13 Also, where a law stipulates that recourse shall first be had to conciliation and one of the parties has failed to comply with the provisions of that law, legal action can be brought to compel the defaulting party to comply. However, a major problem with compelling an unwilling party to conciliate is that conciliation proceedings in such circumstances are likely to be unsuccessful.
Advantages of conciliation
There are many reasons why parties to a dispute should prefer to adopt conciliation over other dispute resolution mechanisms like litigation and arbitration. These include the following.
Flexibility
Conciliation proceedings are highly flexible and less formal. Parties are allowed a great degree of control over the procedures that are to be adopted for the proceedings. The parties can chose to exclude or vary the stated procedure for conciliation under the relevant law.Footnote 14 This has effect of speeding up conciliation proceedings.
Confidentiality
Compared to other dispute resolution mechanisms, conciliation is characterized by a very high level of confidentiality and privacy. Conciliation proceedings are held in private and a duty is usually imposed on the conciliators and the parties not to disclose any matter relating to the proceeding.Footnote 15 This is not obtainable in arbitration where, although proceedings may be held privately, the arbitrator(s) and the parties are not placed under any legal duty of non-disclosure.
Reduced costs
Using conciliation to settle disputes is more economical when compared to other dispute resolution mechanisms such as litigation and arbitration. For example, the parties have the option of representing themselves.Footnote 16 Also, the fact that the convenience to the parties is taken into consideration in choosing the venue for meetings has the effect of making conciliation more economical, as parties will always chose a venue proximate to them, thereby reducing the cost of travel and other associated logistics. This is not obtainable in litigation, as the convenience of the court customarily overrides that of the parties.
Parties are responsible for the success or failure of proceedings
Unlike in litigation where lawyers dominate the proceedings, conciliation enables parties to participate directly in the proceedings. This makes it easier for parties to control the pace of proceedings and avoid delays. Thus, conciliation creates an environment where the parties are solely responsible for the success or failure of proceedings because, since a conciliator cannot impose a settlement on the parties, the successful resolution of a dispute is only possible with the consensus of the parties involved. This is quite different from what obtains in arbitration and litigation, where decisions are imposed on the parties without their consent. In litigation and arbitration, parties are usually not responsible for the success or failure of proceedings, as this may be dependent on the lawyers, arbitrator or judge.
Mutually satisfactory solutions
The adversarial postures taken by parties in litigation further aggravate the communication problems inherent in most disputes and also cause more damage to the relationship between the parties. However, conciliation improves communication and relationships. The entire process of conciliation encourages parties to work out a mutually satisfactory solution to their dispute. This approach preserves any relationship that existed between them before the dispute. Thus, the aim of conciliation is to reconcile the parties to their relationship before the dispute. On the other hand, arbitration may appear to be conciliatory in nature, yet to some extent it encourages a “rights based approach” to dispute resolution, with many instances for parties to seek judicial intervention.Footnote 17 Consequently, arbitration is usually seen as a first step to litigation.Footnote 18 However in conciliation there is a high probability that the parties will abide by any settlement agreement reached at the conclusion of proceedings, because they voluntarily participated in the proceedings and gave consensus to the settlement. This clearly contrasts with the outcomes in arbitration and litigation, where parties may sometimes refuse to abide by an award or judgment and even strive to frustrate its enforcement where they perceive that the award or judgment was unfairly imposed on them.Footnote 19
Expertise
Conciliation allows parties to appoint or hire experts to handle some crucial aspects of the dispute resolution process. For instance, parties in a maritime dispute may opt to appoint a maritime expert to act as a conciliator in respect of their dispute. This encourages a situation where the best possible solution to the dispute is achieved.
Some criticisms of conciliation
A critical evaluation of conciliation will necessarily raise some crucial issues that determine the viability of conciliation as an ADR mechanism. This section addresses some of these issues.
Prolongation of dispute resolution and increased expenses
Conciliation may sometimes be criticized for prolonging dispute resolution and increasing the parties' expenses as disputes may eventually be litigated. For instance, most conciliation agreements stipulate that, where conciliation fails, the parties will have recourse to arbitration and, where arbitration falls, the parties will resort to litigation. Consequently, using conciliation may amount to a waste of time and money as disputes may eventually go to court. Whether this criticism holds true is dependent on the willingness of parties to resolve a dispute through conciliation. Where the parties are willing to settle, conciliation will definitely succeed. However, where a party is recalcitrant and unreliable, it is best for the conciliation agreement to be terminated, so that parties do not embark on a futile exercise. Sometimes, the commencement of judicial proceedings is all that is needed for an unreliable party to show genuine commitment to conciliation. As Alan Limbury put it, “one party is happy to stall until faced with the reality of litigation”.Footnote 20
Unpredictability
Conciliation may also be criticized as being unpredictable, as the success of the proceedings depends on the will of the parties who have the power to terminate the proceedings at any timeFootnote 21 and who also cannot be bound without their consent. In view of this, it may be feared that conciliation proceedings may well end without a settlement. However, where the parties show genuine commitment to conciliation, it is unlikely that they will terminate the proceedings without a successful settlement of their dispute.
Limited powers of a conciliator
Apparently, a conciliator has no powers to deal with issues which usually arise during the course of proceedings, such as compelling the attendance of a witness or the production of necessary documents. This no doubt may sometimes make parties have less respect for a conciliator. However, where parties exhibit good faith, issues relating to the compulsion of witness attendance and the production of documents will not hinder conciliation, because the parties will co-operate with the conciliator and comply with requests made by him towards the settlement of the dispute. Thus, unless the parties have predetermined that conciliation proceedings will fail (which is very unlikely), it will be in their best interest to show respect to a conciliator, since they appointed him. Furthermore, whether or not proceedings are successful, the parties are under a duty to pay the conciliator's fees.Footnote 22
Absence of precedents
Another criticism of conciliation is that it does not encourage the development of legal rules and research as it does not lay down precedents for reference purposes. However, it should be pointed out that the scale for measuring the contribution of conciliation to legal development should not be whether it produces legal precedents; instead it should be measured by its effectiveness in settling disputes in a way that is satisfactory to both parties without the usual delays that are associated with judicial processes, and by its ability to craft outcomes that meet the interests of parties in a way which may not be achieved by adjudication.
THE LEGAL FRAMEWORK FOR CONCILIATION IN NIGERIA
The Nigerian Arbitration and Conciliation Act of 1988 (the Act)Footnote 23 creates the legal framework for domestic and international commercial conciliation in Nigeria. Although the Act also creates a legal framework for arbitration in Nigeria, this article is only concerned with analysing the provisions relating to conciliation.
Domestic conciliation
Domestic conciliation deals with the settlement of domestic disputes. “Domestic disputes” in this context refers to disputes between parties that are both resident within Nigeria. The provisions on domestic conciliation are contained in part II of the Act and they are examined below.
Right to settle disputes by conciliation
The Act recognizes the right of parties to an agreement to settle their dispute through conciliation. Thus, section 37 of the Act provides that: “[n]otwithstanding the other provisions of this Act, 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.”
Apparently, the Act does not restrict its application to a defined class of agreements or to a certain class of disputes that may arise within an agreement. Consequently, disputes including trade disputes, commercial disputes, political disputes, and family and matrimonial disputes may be settled by conciliation under the Act, provided that there was an agreement between the parties and that the dispute relates to the agreement. The dispute must therefore relate to an existing agreement which may have been made orally or in writing.Footnote 24 However, there are situations where there may not be any agreement or relationship between parties but a dispute has arisen between them.Footnote 25 There may also be an agreement between the parties and a dispute not contemplated by the agreement has arisen between them. The question then is whether it is possible for the parties in such situations to seek a settlement of their dispute through conciliation under the provisions of the Act. It appears that a literal interpretation of section 37 would imply that parties in such situations cannot conciliate under the provisions of the Act. Nevertheless, it is submitted that, in such situations, parties can still agree to adopt conciliation to resolve their dispute and any agreement arising from that process will be binding on the parties if it is accepted by them.
Request to conciliate and commencement of conciliation proceedings
Where a party wishes to initiate conciliation proceedings, that party shall send to the other party a written request to conciliate under the provisions of the Act.Footnote 26 Such a request to conciliate must contain a brief statement setting out the subject of the dispute.Footnote 27 Conciliation proceedings shall then be deemed to commence on the date the request to conciliate is accepted by the other party.Footnote 28
Appointment of conciliators
Where a request to conciliate has been accepted, the parties shall refer the dispute to a conciliatory body consisting of one or three conciliators.Footnote 29 If the parties agree that only one conciliator will be appointed, then the appointment will be made jointly by the parties.Footnote 30 Where the parties agree to appoint three conciliators, each party shall appoint one conciliator and the third will be jointly appointed by the parties.Footnote 31 Unlike in arbitration, there is no provision empowering the court or a third party to appoint a sole conciliator or a third conciliator for the parties if the parties fail to agree in that regard.Footnote 32 The Act does not contain any provision regarding how the three conciliators have to reach their decision, such as whether the decision must be unanimous or whether a majority decision will suffice. Also there are no provisions as to who will preside over the conciliatory body or the scope of his powers.Footnote 33 It is suggested that, where there are three conciliators, the third conciliator who was jointly appointed by the parties should be given the power to preside over the conciliatory body. This would ensure that both parties are equally carried along and also enhance the confidence of the parties in the proceedings.
Action by the conciliation body
Once appointed, the conciliator(s) study the details of the dispute and procure any other information that may be required for the purpose of settling the dispute.Footnote 34 The parties may have to appear in person before the conciliator(s) and may be legally represented.Footnote 35 The Act does not stipulate whether the conciliator(s) shall invite oral or written submissions from the parties. However, it is suggested that, in the absence of any statement of the parties specifying the form in which submissions are to be made, written submissions should be invited from the parties. Also, where oral explanations are made by the parties or their representatives, they should be recorded by the conciliator(s) for storage and easy referencing.
After the conciliator(s) have examined the case and heard the parties, they will have to submit the terms of settlement to the parties.Footnote 36 Where the parties agree to the terms of settlement, the conciliator(s) draw up and sign a record of settlement.Footnote 37 If the parties do not agree to the terms of settlement, they may submit the dispute to arbitration in accordance with any agreement between themFootnote 38 or take any action in court as they deem fit.Footnote 39 Nothing done in connection with conciliation proceedings affects the legal rights of the parties in any subsequent submission to arbitration or legal proceedings.Footnote 40
Issues not covered by the Act
The Act does not address some crucial issues, including: whether parties are free to initiate arbitral or judicial proceedings while conciliation proceedings are pending; whether the statutes of limitation apply to conciliation proceedings;Footnote 41 whether the conciliator(s) or parties can terminate the conciliation proceedings before a settlement agreement is signed by the parties; and whether the conciliator can act as an arbitrator in other proceedings. There are also no provisions relating to vital issues such as: the definition of conciliation; the impartiality of a conciliator; the disclosure of information received by a conciliator; the confidentiality of conciliation proceedings; the admissibility of evidence in other proceedings; and the enforcement of a settlement agreement.
By not addressing some of these issues, the Act clearly falls short of the standards set in the Model Law. In contrast to the Act, the Model Law stipulates that parties to a dispute may be permitted to initiate arbitral or judicial proceedings under certain circumstances, although the initiation of such proceedings is not to be regarded as a termination of conciliation proceedings.Footnote 42 The conciliator(s) or the parties can also terminate conciliation proceedings before a settlement agreement is signed by the parties.Footnote 43 The Model Law also precludes a conciliator from acting as an arbitrator in further proceedings, unless the parties have agreed that he should act in that capacity.Footnote 44 The Model Law explicitly defines the meaning of conciliation;Footnote 45 it also imposes duties of impartialityFootnote 46 and non-disclosure on a conciliator.Footnote 47 Additionally, the Model Law creates explicit provisions for protecting the confidentiality of conciliation proceedings,Footnote 48 alongside other issues such as the admissibility in other proceedings of evidence obtained during conciliation proceedingsFootnote 49 and the enforcement of a settlement agreement.Footnote 50
International commercial conciliation
International commercial conciliation refers to the use of conciliation in the settlement of international commercialFootnote 51 disputes. Conciliation is said to be international if: the parties to an agreement to conciliate have, at the time of the conclusion of that agreement, their places of business in different states; or the state in which the parties have their places of business is different from either (i) the state in which a substantial part of the obligations of the commercial relationship is to be performed or (ii) the state with which the subject matter of the dispute is most closely connected.Footnote 52
The provisions relating to international commercial conciliation in Nigeria are contained in section 55 of the Act and in the Conciliation Rules.Footnote 53 Section 55 provides that: “[n]otwithstanding the provisions of the Act, the parties to an international commercial agreement may agree in writing that disputes in relation to the agreement shall be settled by conciliation under the Conciliation Rules set out in Schedule 3 to this Act.”
The Conciliation Rules establish more elaborate provisions on the use of conciliation in dispute resolution; however they do not supplement the provisions of the Act on domestic conciliation as they apply strictly to international commercial conciliation.Footnote 54 Where there is conflict between the provisions of the Act and the Conciliation Rules, the Act will prevail.Footnote 55 For the rules to apply to the conciliation of disputes arising out of a contractual or legal relationship, the parties must agree to their application.Footnote 56 The parties may agree to exclude or vary any of the provisions contained in the rules at any time.Footnote 57
Commencement of conciliation proceedings
Under the Conciliation Rules, a party initiating conciliation sends the other party a written invitation to conciliate, which briefly identifies the subject matter of the dispute.Footnote 58 Conciliation proceedings will be deemed to commence when the other party accepts the invitation to conciliate. Where the invitation is orally accepted, it is advisable that it is confirmed in writing.Footnote 59 If the party initiating conciliation does not receive a reply within 30 days from the date on which the invitation was sent or within the period of time specified in the invitation, he may treat the invitation as rejected and inform the other party accordingly.Footnote 60
Appointment of conciliators
The Conciliation Rules provide that there shall be one conciliator, unless the parties agree that there shall be two or three conciliators. Where there is more than one conciliator, the general rule is that they should act jointly.Footnote 61 In conciliation proceedings with one conciliator, the parties shall endeavour to reach agreement on the identity of the sole conciliator.Footnote 62 In proceedings with two conciliators, each party appoints one conciliator.Footnote 63 In proceedings with three conciliators, each party shall appoint one conciliator and also reach agreement on the identity of the third.Footnote 64 Parties may enlist the assistance of an appropriate institution or person in connection with the appointment of conciliators.Footnote 65 However, in recommending or appointing individuals to act as conciliators, the institution or person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator.Footnote 66
Matters connected with conciliation proceedings
Under the Conciliation Rules, a conciliator shall, on his appointment, request each party to submit to him a brief written statement describing the general nature of the dispute and the points in issue.Footnote 67 The parties may be requested to submit a written statement of their positions, supported by any document or evidence.Footnote 68 Each party shall also send a copy of his statement to the other party.Footnote 69 The parties may be represented or assisted by persons of their choice.Footnote 70 Also, in order to facilitate the conduct of the conciliation proceedings, the parties may arrange for administrative assistance by a suitable institution or person.Footnote 71 The conciliator may invite the parties to meet him. He may communicate with the parties orally or in writing. He may also meet or communicate with the parties together or separately.Footnote 72 However, where he receives factual information concerning the dispute from a party, he must disclose the substance of that information to the other party, so that the party may present any explanation which he considers appropriate.Footnote 73
Unless the parties have agreed a venue for the conciliatory meetings, the venue will be determined by the conciliator after consultation with the parties and having regard to the circumstances of the conciliation proceedings.Footnote 74 The conciliator will assist the parties in an independent and impartial manner to settle their dispute amicably.Footnote 75 On the other hand, the parties themselves are under a duty to co-operate with the conciliator.Footnote 76 The conciliator may at any stage of the proceedings make proposals for the settlement of the dispute.Footnote 77 Also each party, on his own initiative or at the invitation of the conciliator, may submit a suggestion for the settlement of the dispute.Footnote 78 When it appears to the conciliator that there exist elements of a settlement that would be acceptable to the parties, he formulates the terms of a possible settlement which he submits to the parties for their observations. The conciliator may have to reformulate the terms of a possible settlement after receiving the observations of the parties in order to accommodate such observations.Footnote 79 Where the parties reach agreement on a settlement of the dispute, they draw up and sign a written settlement agreement. The parties may ask the conciliator to draw up or assist them in drawing up the settlement agreement.Footnote 80 Where the parties sign the settlement agreement, it puts an end to the dispute and they are bound by the agreement.Footnote 81 All matters relating to the conciliation proceedings and the settlement agreement are to be kept confidential by the conciliator and the parties, except where disclosure is necessary for the purposes of implementing or enforcing the agreement.Footnote 82
Deposits
Where a conciliator has been appointed under the Conciliation Rules, he may request each party to deposit an equal amount of money as an advance for the costs which he expects to be incurred in connection with the proceedings.Footnote 83 The conciliator may also request supplementary deposits in equal amounts from the parties.Footnote 84 If such requests are not fully complied with by both parties within 30 days, the conciliator may suspend the proceedings or make a written declaration to the parties, terminating the proceedings from the date of that declaration.Footnote 85 The conciliator is also under a duty to render accounts of all deposits received and also to return any unexpended balance to the parties upon the termination of conciliation proceedings.Footnote 86
Termination of conciliation proceedings
The Conciliation Rules provide that conciliation proceedings terminate where the parties have successfully concluded proceedings by signing a settlement agreement. In this regard, the proceedings will be deemed to have been terminated on the date on which the settlement agreement is signed.Footnote 87 Proceedings can also be terminated by a written declaration of the conciliator after consultation with the parties to the effect that further efforts at conciliation are no longer justifiedFootnote 88 or by the parties through a written declaration to the conciliator.Footnote 89 A party can also terminate proceedings through a written declaration addressed to other party and the conciliator to the effect that proceedings are terminated on the date of that declaration.Footnote 90 Upon the conclusion or termination of conciliation proceedings, the conciliator fixes the “costs” of the conciliation and gives written notice of those costs to the parties.Footnote 91 The term “costs” includes: the fees of the conciliator which shall be reasonable in amount; the travel and other expenses of the conciliator; the travel and other expenses of witnesses requested by the conciliator with the consent of the parties; and the cost of any assistance provided by an institution or person in the appointment of conciliators or any administrative assistance provided by such institution or person in facilitating the conduct of the proceedings.Footnote 92
Resort to arbitral or judicial proceedings
The Conciliation Rules provide that parties are not to initiate any arbitral or judicial proceedings in respect of a dispute while conciliation proceedings are still pending.Footnote 93 Also a conciliator is precluded from acting as an arbitrator or as a representative or counsel for one of the parties in any subsequent arbitral or judicial proceedings in respect of a dispute that was the subject of the conciliation proceedings. The conciliator is also precluded from being a witness in such proceedings.Footnote 94 The parties are explicitly precluded from relying on or introducing in any subsequent arbitral or judicial proceedings any views or suggestions made by a party in respect of a possible settlement of the dispute. This preclusion also extends to admissions made by a party in the course of the conciliation proceedings and proposals made by the conciliator, as well as to the fact that a party had indicated his willingness to accept a proposal for settlement made by the conciliator.Footnote 95
Proposed reforms to domestic conciliation under the Act
On 23 September 2008, the federal government of Nigeria inaugurated the National Committee on the Reform and Harmonization of Arbitration and ADR Laws in Nigeria.Footnote 96 One of the committee's terms of reference was to review Nigerian laws on arbitration and other ADR mechanisms with a view to proposing necessary reforms to bring them in line with modern trends. In line with this, the committee reviewed the provisions relating to conciliation under the Act and proposed some reforms. These proposed reforms are contained in a draft bill titled the Draft Federal Arbitration and Conciliation Bill (the Draft Bill)Footnote 97 which has been presented before the Nigerian National Assembly. The Draft Bill proposes to amend section 37 of the Act by adopting the Model Law definition of “conciliation”.Footnote 98 The Draft Bill also introduces a set of entirely new provisions by adopting various aspects of the Model Law. These new provisions relate to the: impartiality of a conciliator;Footnote 99 disclosure of information by a conciliator;Footnote 100 confidentiality of conciliation proceedings;Footnote 101 admissibility of evidence relating to conciliation proceedings in judicial or arbitral proceedings;Footnote 102 role of the conciliator in other proceedings;Footnote 103 and enforcement of settlement agreements.Footnote 104 The Draft Bill also introduces a provision creating civil immunity for conciliators and conciliation institutions.Footnote 105 In this regard, it provides that conciliators and conciliation institutions shall be immune from civil liability for any act or omission done while engaged in conciliation, unless such act or omission was done in bad faith with malicious intent or in a manner exhibiting a wilful, wanton disregard of the rights, safety or property of another.Footnote 106 The Draft Bill also introduces provisions for the application of the statutes of limitation to conciliation proceedings.Footnote 107 In this regard, it provides that limitation laws may apply to conciliation proceedings as they apply to legal proceedings.Footnote 108 Thus, for the purpose of computing whether the time set under a statute of limitation has elapsed with regard to the commencement of proceedings (including conciliation proceedings) in respect of a dispute which was the subject matter of a conciliation agreement which a court has ordered to be set aside, the period between the commencement of the conciliation proceedings and the date of the court order setting it aside will be excluded from the computation.Footnote 109 Also, in determining the time when a cause of action accrued under a limitation law, any provision in the conciliation agreement which stipulates that the conciliation agreement is a condition precedent to legal proceedings will be excluded by the court.Footnote 110 The Draft Bill further provides that, in computing the time for the commencement of proceedings to enforce a conciliation settlement agreement, the period between the commencement of conciliation proceedings and the date of the settlement agreement shall be excluded.Footnote 111
However, the Draft Bill falls short of the standards laid down in the Model Law. For example, the Draft Bill fails to state whether parties are free to initiate arbitral or judicial proceedings while conciliation proceedings are pending. The position under the Model Law is that, where the parties have agreed to conciliate and have expressly undertaken not to initiate arbitral or judicial proceedings with respect to an existing or future dispute, that undertaking shall be given effect by the arbitral tribunal or the court until the terms of the undertaking have been complied with. However, the arbitral tribunal or the court may waive the undertaking not to initiate arbitral or judicial proceedings where it is necessary for a party to initiate arbitral or judicial proceedings in order to preserve its rights. Nevertheless, the initiation of such proceedings is not to be regarded as a waiver of the agreement to conciliate or as a termination of conciliation proceedings.Footnote 112 The Draft Bill also fails to state how conciliation proceedings can be validly terminated before a settlement agreement is signed by the parties. In contrast, the Model Law establishes elaborate provisions pertaining to the termination of conciliation proceedings.Footnote 113
Conciliation proceedings and the Statutes of Limitation
As noted earlier, the Act does not contain provisions as to whether the statues of limitation apply to conciliation proceedings.Footnote 114 The same lacuna also exists under the Conciliation Rules. Under the Conciliation Rules the situation is more complicated because the parties are explicitly precluded from initiating judicial proceedings while conciliation is pending.Footnote 115 Does this imply that the statutes of limitation do not presently apply to conciliation proceedings? The legal position as held by Nigerian courts is that the limitation period begins to run from the moment the cause of action arose.Footnote 116 In John Eboigbe v Nigeria National Petroleum Corporation,Footnote 117 one of the issues contended before the Supreme Court was whether negotiation between parties stops the limitation period from running. The court held that, although the law does not prohibit parties to a dispute from engaging in negotiations for the purpose of settling the dispute, such negotiations generally do not prevent or stop the limitation period stipulated by a statute from running and that the best course of action is for a person to whom a right of action has accrued to institute an action against the other party, so as to protect his interest or right in case the negotiation fails. The court further held per Adio JSC: “[t]he law does not prohibit parties to a dispute from engaging in negotiation for the purpose of settling the dispute. Except where as a result there is what can be reasonably regarded as a settlement of the dispute or an admission of liability on the part of a total fact the limitation time continues to run.”Footnote 118
In Nwadiaro v Shell Petroleum Development Company the Court of Appeal also held:
“The law that in considering whether an action is statute barred, negotiations between the parties will not stop time from running is subject to a qualification where there has been an admission of liability during negotiation and all that remains is fulfillment of the agreement. It cannot be just and equitable that the action would be barred after the statutory period of limitation … to the action of the plaintiff were the defendant to resile from his agreement during negotiations”.Footnote 119
In the light of the above, it follows that negotiations between parties will not stop the limitation period from running unless there has been a settlement or an admission of liability by the defendant. Since there are presently no provisions as to how the statutes of limitation will apply to conciliation proceedings, it appears that a good course of action may be for a party to initiate legal proceedings in order to protect his or her right of action from being statute barred in case conciliation fails. However, while this option may be possible in domestic conciliation as the Act does not explicitly preclude parties from initiating such proceedings, it is not possible in international commercial conciliation because the Conciliation Rules preclude parties from initiating judicial proceedings while conciliation proceedings are pending.Footnote 120 Consequently, when a party in an international commercial conciliation is faced with preserving his or her right of action from being statute barred while conciliation proceedings are pending, the only available option may be for that party to terminate conciliation proceedings in order to initiate judicial proceedings. The position is quite different under the Model Law which provides that:
“Where the parties have agreed to conciliate and have expressly undertaken not to initiate during a specified period of time or until a specified event has occurred arbitral or judicial proceedings with respect to an existing or future dispute, such an undertaking shall be given effect by the arbitral tribunal or the court until the terms of the undertaking have been complied with, except to the extent necessary for a party, in its opinion, to preserve its rights. Initiation of such proceedings is not of itself to be regarded as a waiver of the agreement to conciliate or as a termination of the conciliation proceedings”.Footnote 121
Thus, the Model Law recognizes the need for courts not to entertain a matter which is the subject of a conciliation agreement where the parties have made an undertaking not to initiate judicial proceedings, unless those proceedings are to preserve a party's rights. This includes proceedings to preserve a party's right of action in court from being statute barred after the limitation period. However, such judicial proceedings are not to be regarded as terminating the conciliation agreement or proceedings. It is submitted that the absence of a provision similar to article 13 of the Model Law from the Act as well as from the Conciliation Rules is an anomaly. It is also submitted that this anomaly has been remedied to some extent by the proposed reforms contained in section 72 of the Draft Bill. However, the anomaly under the Conciliation Rules has not been remedied, given that the proposed reforms in the Draft Bill do not address matters under the Conciliation Rules. It may be necessary to remedy this state of affairs by amending the rules to establish a provision similar to article 13 of the Model Law or section 72 of the Draft Bill.
MAKING CONCILIATION A MORE VIABLE ADR MECHANISM THROUGH INSTITUTIONALIZATION
It is apparent that, notwithstanding the advantages of conciliation over litigation and arbitration, the practice of conciliation in Nigeria is yet to achieve a significant level of popularity. This can be linked to factors such as lack of awareness of the benefits of conciliation, and the fact that many Nigerian lawyers have an adversarial mindsetFootnote 122 and may therefore discourage disputants from resolving their disputes through conciliation. It is also possible that some disputants are not satisfied unless a claim has been litigated in court. Nevertheless, the author suggests that more viability can be injected into the practice of conciliation in Nigeria through institutionalization. Institutionalization in this context implies the establishment of an institution that relies solely on conciliation to resolve disputes. This has been done in some countries. For example, in the United States, the government has established an institution known as the United States Federal Mediation and Conciliation ServiceFootnote 123 which relies on conciliation to resolve most labour and industrial disputes as well as other forms of dispute. The institution is established by the United States Labour Relations Act of 1947 as an independent agency of the United States government, responsible for preventing and minimizing the interruption of the free flow of commerce that results from labour disputes, by assisting parties involved in labour disputes to settle their differences through mediation and conciliation.Footnote 124 The agency may become involved to resolve a trade dispute on its own motion or at the request of one or more parties to the dispute. Where it is unable to bring parties to an agreement within a reasonable time, it may seek to induce them to settle the dispute voluntarily through arbitration and other procedures without resorting to strike action, lock outs or coercive methods. A similar institution has also been established by the government of Canada.Footnote 125
The institutionalization of ADR as result of the creation of the multi-door court houses in NigeriaFootnote 126 has to some extent enabled the institutionalization of conciliation due to the provision of mediation services in the multi-door court houses, yet more can still be done through the creation of a national body like the Federal Mediation and Conciliation Service and the establishment of uniform national standards to guide the conduct of conciliators in Nigeria.Footnote 127 It is also suggested that such an institution and even the courts should have lists of qualified conciliators so as to be able to refer disputing parties to them easily. This will go a long way towards creating awareness and enhancing the credibility of conciliation where it is offered outside the multi-door court houses.
CONCLUSION
This article has attempted to give an overview of conciliation as well as outline the benefits of using conciliation as a dispute resolution mechanism. It has analysed the law of conciliation in Nigeria. In so doing, it highlighted some legal issues that have not been addressed by the Nigerian Arbitration and Conciliation Act, the Conciliation Rules and the Federal Arbitration and Conciliation Draft Bill. The article suggests that there is need for the Draft Bill to conform to the UNCITRAL Model Law on International Commercial Conciliation as this will ease some of the legal issues identified in this article.
Apparently, the benefits of conciliation distinguish it as probably the best conflict resolution mechanism, because its sole purpose is to achieve the reconciliation of disputing parties.Footnote 128 Although the success of conciliation is highly dependent on the exercise of good faith between parties and the adoption of a mutually satisfying approach to dispute resolution, it still has a higher probability of success than arbitration and litigation. As the major providers of dispute resolution services, lawyers have a crucial role to play in promoting public awareness of conciliation as a viable ADR mechanism in Nigeria. Litigation and arbitration should not be seen as the most profitable or exclusive means of resolving civil disputes. Evidently, most people would wish to settle their disputes amicably out of court and also preserve the relationship that existed prior to a dispute; conciliation provides the most perfect mechanism to realize this.
