Developments, review of arbitration and mediation Act 2023 – Part 3
Although it seems that any court has the authority to grant interim relief, the Act includes a provision stating that the court may refuse to recognise or enforce an interim measure if it determines that the measure is incompatible with the conferred powers of the Panel.
Consequence of withdrawal from appointment
The AMA introduces provisions regarding the consequences of an arbitrator’s withdrawal from their appointment. This provision grants parties involved in arbitration the right to mutually agree upon the specific repercussions that will follow if an arbitrator withdraws from their appointment.
This provision recognises the importance of party autonomy and allows the parties involved in the arbitration to have a say in the outcome of such a situation. It would also help maintain the continuity of the proceedings. Instead of automatically halting the arbitration in the event of an arbitrator’s withdrawal, the parties can agree on alternative measures to ensure the smooth continuation of the process. This avoids unnecessary delays and minimises the potential disruption to the resolution of the dispute.
The new Act introduces and recognises the immunity of an arbitrator, an appointing authority, or an arbitral institution. Under the Act, an arbitrator, an appointing authority, or an arbitral institution is granted immunity in the performance of their duties; unless it can be proven that they acted in bad faith.
However, it’s important to note that this immunity does not exempt an arbitrator from any liabilities arising from their withdrawal. This provision ensures that arbitrators, similar to litigators, are now safeguarded by law while carrying out their responsibilities, alleviating concerns about potential liability.
This is a novel provision that is not contained in the ACA. Indeed, this provision encourages impartial decision-making by shielding arbitrators from the fear of personal liability; the provision enables them to make decisions based solely on the merits of the case. It fosters an environment where arbitrators can exercise independent judgment without the concern of facing legal consequences for their decisions.
Grounds for setting aside an arbitral award
The Act has introduced significant changes to the grounds for setting aside an arbitral award. The Act does not include ‘misconduct of the arbitrator’ as a ground for challenging arbitral awards. This is a positive development that will deal with tactics like alleging arbitrator misconduct on tenuous grounds, which are often accompanied by injunctions to restrain arbitral proceedings. Also, it is now necessary for a party to demonstrate that the ground for setting aside the award ‘has caused or will cause substantial injustice to the applicant’.
The Act takes a much more stringent stance setting aside arbitral awards, restricting the courts’ authority to get involved and potentially annul arbitral awards, improving the finality and preservation of awards.
Introduction of provisions on mediation
The repealed ACA had no specific provision for mediation, despite it being a frequently utilised alternative dispute resolution mechanism in Nigeria. Conciliation was contained in the ACA, perhaps failing to understand the distinction between evaluative mediation and facilitative mediation.
The Arbitration and Mediation Act recognises and codifies Mediation as a dispute resolution mechanism, but also blurs the line between evaluative mediation (continentally defined as Conciliation) and Facilitative Mediation (which purists insist in the only true form of Mediation).
Summarily, the Act defines ‘mediation,’ as the process where parties seek the assistance of a neutral third party or parties to help them in reaching a mutually agreeable resolution for their dispute arising from a contractual or legal relationship. This definition acts as an umbrella for various terms like mediation, conciliation, or other similar expressions.
Consequently, if parties mutually decide to resolve their dispute through mediation, conciliation, or similar alternative dispute resolution methods, the relevant provisions within the Act that pertain to mediation will be applicable. This implementation establishes an integrated procedural pathway for enforcing alternative dispute resolution clauses specified in agreements. In essence, it creates a cohesive and structured approach that facilitates the resolution of disputes through mediation or similar methods, offering parties an efficient means to address conflicts outside of traditional litigation.
Some key provisions of the Act on Mediation are:
There shall be one mediator unless the parties agree otherwise. A time frame of 30 days for a party to receive the acceptance of the invitation to mediate. Failure to respond may be treated as a rejection to mediate.
Mediation sessions can be conducted using electronic means, such as video conferencing or other similar methods of digitally transmitting voice and/or image. However, it is crucial to ensure the identification of the involved parties and adhere to the principles of mediation that have been established.
The court or arbitral tribunal will enforce the commitment of the parties to engage in mediation and refrain from initiating any other arbitration or judicial proceedings during the specified period. This ensures that the parties actively participate in the mediation process and explore the potential for amicable resolution before resorting to formal legal proceedings.
Admissibility of evidence – The provision regarding the admissibility of evidence states that certain statements and admissions made by a party, as well as proposals made by the mediator during mediation proceedings, cannot be used as evidence in other arbitral or judicial proceedings. This provision aims to maintain the confidentiality and privacy of the mediation process, ensuring that information shared during mediation is protected and not used against parties in subsequent legal or arbitration proceedings.
Immunity for mediators and mediation providers- Under the new Act, mediators and mediation providers are not liable for any act done or omitted in the discharge or purported discharge of their functions, unless the act or omission is shown to have been done in bad faith.
Furthermore, settlement agreements that result from successful mediation are now legally binding on the parties. These agreements can be enforced in court as a contract, consent judgment, or consent award, depending on the applicable legal framework. This provision strengthens the enforceability of settlement agreements reached through mediation, providing parties with a reliable and recognized mechanism to ensure compliance with the terms and conditions agreed upon during the mediation process.
This Arbitration and Mediation Act aims to enforce international mediation settlement agreements. It states that the Singapore Convention will be applicable to international settlement agreements made in states other than Nigeria, under certain conditions. These conditions include the State being a party to the Singapore Convention and the dispute arising from a legal relationship considered commercial under Nigerian laws.
The Act applies when parties have agreed in writing, and it covers various types of mediation, including international and domestic commercial mediation, domestic civil mediation, and both domestic and international settlement agreements resulting from mediation.33
Further, Section 87 of the Act clearly establishes the scope of application of the Singapore Convention on Mediation to international settlement agreements made in States other than Nigeria with the conditions that the State is a party to the Singapore Convention (reciprocity reservation) and the dispute arises out of what would be considered a ‘commercial’ legal relationship under Nigerian law.
The Arbitration and Mediation Act is a significant step forward in the legislative framework of alternative dispute resolution in Nigeria. The former Act had become dated, and the evolution of ADR practice required an update in the legislative regime. Whilst the former Act focused more on arbitration, the new Act introduces provisions that recognise the importance of mediation as a means of resolving disputes.
While Act addresses key gaps and shortcomings of its predecessor, there are still some areas that it could have been improved upon. Arbitration and Mediation are only two of the many mechanisms in the ADR Spectrum; it is hoped that the interface between the industry practitioners and Legislature will lead to further development of the Legislative framework to bring Nigeria up to par with international best practices.
Lawrence-Nemi, LLM (Aberdeen MPA (Lond.) FCIarb (Uk) (FICMC) is a renowned arbitrator.