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Disputes are an inevitable part of life. From personal relationships to business relationships, disputes are bound to arise. Over the years, different modes of dispute resolution have been introduced. The modes of dispute resolution can be broadly categorized in two, vis; traditional dispute resolution and alternative dispute resolution. The traditional dispute resolution system is Litigation. However, an Alternative Dispute Resolution became expedient. Alternative Dispute Resolution ("ADR") refers to any method of resolving disputes without litigation. ADR methods include the following: mediation, arbitration, conciliation, negotiation, etc.
Nigeria, like other jurisdictions, has a legal framework for ADR. Arbitration and conciliation were formerly regulated by the Arbitration and Conciliation Act, 1988 (ACA). In a bid to provide a unified legal framework for the fair and efficient settlement of commercial disputes by arbitration and mediation by setting out substantive and procedural provisions, ex-president Muhammadu Buhari on the 26th day of May 2023, assented to the Arbitration and Mediation Act, 2023.
Some of the novel provisions of the Act include:
1. Allowance for Electronic Communication
Section 2(4) provides that the requirement that an Arbitration Agreement shall be in writing is met if the agreement is contained in an electronic communication. This section takes into account the advances in technology and also makes it more convenient for parties who may not be in the same country or state. This is a positive development as it shows the Act keeping in line with updated technological trends.
2. Appointment based on Nationality
Section 7 states that a person would not be precluded from being appointed as an arbitrator by virtue of their nationality. This is a welcome improvement because it allows for a larger selection pool for arbitrators and would allow for more efficient provision of arbitration services as competent arbitrators are not hindered by nationality.
3. Immunity for Arbitrators
Section 13 of the new Act provides for immunity for arbitrators, appointing authorities and arbitral institutions in so far as they are not acting in bad faith. This could be seen as a welcome development as it ensures arbitrators need not worry about liability for any acts done in their capacity. However, one may argue that this could allow for some form of corruption as the standard for "bad faith" would be up for judicial discretion.
4. Number of Arbitrators
According to Section 6, the arbitral tribunal would only consist of one arbitrator if a number of arbitrators is not agreed upon. In addition to this, the Director of the Regional Centre for International Commercial Arbitration, Lagos, shall be deemed to be the appointing authority designated by the parties in international arbitration if no appointing authority is designated or agreed to be designated by the parties. This was not accounted for under the ACA and shows the new Act attempting to make arbitral processes more affordable and timelier by having a default position to fall back on in the event that the parties couldn't make a decision.
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