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Tuesday 10 October 2017

MEDIATION: SETTLING DISPUTES OUT OF COURT IN NIGERIA

Preview

Conflicts of interests in everyday dealings make disputes inevitable but resolvable. The most common mechanism for resolving commercial and civil disputes is litigation, however, litigation has been found not to be suitable for cases that need quick resolution or confidentiality.

A lot of people would prefer their disputes on breach of contracts, employment, debt recoveries, tenancy, properties, and divorce and child custody to be settled in private rather than in the Court (public).

A lot of people would prefer a dispute settlement platform that is devoid of legalities, formalities and technicalities of the Rules of Courts. A lot of people want their commercial disputes settled timeously not only to save cost but to as well as save their investment.

These concerns are addressed by Mediation. Thus, this edition of Akintunde Esan’s Legal Illumination is focus on taking advantage of Mediation to settle disputes without necessarily going to Court or settling out of Court a pending suit.

What is Mediation?

Mediation is the process by which an impartial or neutral third Person known as the Mediator facilitates communication and negotiation between the Parties by assisting them to identify the issues in dispute and help them to reach a mutually satisfying or beneficial resolution. In other words, Mediation is negotiation facilitated or guided by a trained third party.

The Mediation Process

Unlike the litigation and arbitration processes which are adjudicatory and position focused, Mediation is a participatory process in which the mutual Interests and the relationship of the Parties are the main focus. Parties are encourage to find ways to address their present and future needs instead of focusing on who was right or wrong.

Mediation process is consensual process where the Parties determine the rules of engagement, unlike litigation and arbitration where the rules of engagement are set by laws and adjudicatory institutions.

The Mediator’s role is to assist the parties to communicate and negotiate, to creating an enabling environment for a constructive dialogue between the parties to express their interests, needs and concerns and discuss options and make informed decisions.

Litigation and arbitration creates a competitive atmosphere, as it is all about determining who is right or wrong, which act is legal or illegal.

In litigation and arbitration the parties focus is on getting the Judge or arbitrator to affirm their respective positions, claims and counter claims. In mediation the Mediator guides the parties to understand each other’s positions and to subsequently facilitate the resolution of the identified issues which are the roots for their positions.

Issues are raised for the purpose of determination by the Judge or arbitrator according to the governing law or contract signed. In mediation issues are identified for the purpose of mutually exploring or generating mutually beneficial options.

Advantages of Mediation

Customary Mediation had been in existence before the institutionalisation of litigation or arbitration, however, professional Mediation evolved as an alternative dispute resolution platform as a result of their shortcomings.
The advantages of Mediation include:
  • Privacy and confidentiality.
  • Promotes mutual cooperation, it is more about what went wrong and how to fix it .
  • Cost effective 
  • Gives room for creativity.
  • No bureaucracy, a less cumbersome means of resolution.
  • Produce quicker resolutions.
  • The outcome is determined by the Parties not by a Judge or an Arbitrator.
  • Mutually beneficial settlement. 
  • Preserve, or even improve relationship between the Parties. 
  • A voluntary process in which a party cannot be compelled to participate.
Mediation and Reasonableness

The best platform to settle commercial and civil disputes is Mediation, however, the success or failure of Mediation as an alternative means of dispute resolution depends on the degree of the reasonableness of the Parties. 

Reasonableness itself would depend on the nature of the legal advice obtained. A wrong legal advice focuses solely on legalities without considering whether settlement is the reasonable option in the light of the circumstances of a dispute.

The factors to be taken into considering in determining whether Mediation is a reasonable option in the light of the circumstances of a dispute have been noted to generally include:
  • ·       The strength of the claims and counter claims
  • ·        The uncertainties and expenses of litigation
  • ·        The benefits of settling the case rather than disputing it.
Mediation Clause

The Parties to an Agreement may include a Mediation Clause in their Agreement that, in the event of any dispute, both parties shall make recourse to Mediation.

Model Mediation Clause
“Any dispute, controversy or claim arising out of or in connection with this contract, or the termination or invalidity thereof, shall be referred to Mediation in accordance with the Mediation under the Arbitration and Conciliation Act.”
Mediation Settlement Agreement

The resolutions arrived at are better drafted into a formal settlement Agreement and signed by the Parties in order to become an Agreement enforceable in law in  case of any of the Parties reneging or acting contrary to the agreed  resolutions.
 
A Settlement Agreement Memorandum which had been signed by all the parties at the Mediation was held not to be a binding settlement agreement since all parties at the mediation understood that a formal Settlement Agreement had to be drafted and signed[1]

It is has been noted that, Agreements reached through Mediation are mostly likely to last, because the parties themselves play a major role in fashioning the agreement.

It should be noted that “a party shall not be allowed to blow hot and cold in an Agreement he had tacitly endorsed and subscribed to, this will be contrary to public policy and as it relates to our jurisprudence it is irrational and unacceptable.”[2]

Out of Court Settlement

Where parties elect that a dispute be settled out of Court and in furtherance of the same there was mediation and the terms of settlement announced which are acceptable to the parties, the Court of justice would not treat such Mediation lightly. 

Since agreements are meant to be honoured and equity acts in personam, the law and equity will act in unison to estop a party to such Mediation or out of Court settlement who had accepted the terms of settlement from reneging and acting to the contrary of what he had accepted[3].

Consent Judgement

A consent judgment means when the parties unequivocally agree to Terms of Settlement which they mutually refer to the court as a basis for the Court's judgment.[4].

In order to have a consent judgment, the parties must be ad idem as for as the agreement is concerned; their consent must be free and voluntary; and the terms of settlement must be filed in Court. When the Court makes an order based upon such Terms of Settlement, there emerges a consent judgment, from which the parties could appeal only by the leave of the Court.[5]

Out of Court Settlement without Consent Judgement

There are situation where Parties agreed to an out of Court settlement before the completion of a trial without obtaining an order of court to embody the agreed terms. In such a situation the Nigerian Supreme Court held that:

"Where the parties compromise or settle pending proceedings, whether before, at or during the trial, without making provision, expressly or by necessary implication, for obtaining an order of court to embody the agreed terms, such a compromise or a settlement constitutes a new and independent agreement or bargain between the parties made for good consideration and its effect is as follows – 

(a) it puts an end to the proceeding which have been compromised or settled, for they are thereby spent and exhausted.

(b) it precludes parties from taking any further steps in the action; and

(c) it supersedes the original cause of action altogether."

Mediation and Limitation Laws

It is settled law that generally negotiation by the parties does not prevent or stop the period of limitation stipulated by a statute from running. 

The law on this, as stated by the Supreme Court[6]  is that when in respect of a cause of action, the period of limitation begins to run, it is not broken, and it does not cease to run, merely because the parties engaged in negotiation. The rationales for this is that the parties cannot by conduct or consent add to, or subtract from, the contents of a statute[7].

Conclusion

In as long as there are Human interactions, conflicts of interests are inevitable and conflicts of interests make conflicts inevitable. There cannot be Human interactions without Human frictions and Human frictions like the frictions between the male and female genitals will either give birth to pleasure or pain.

In essence, conflict is an inherent part of life that sieves the matters that matter from the matters that do not matter and whether a commercial or civil conflict or dispute will end in pain or in pleasure, satisfaction or dissatisfaction, gain or loss will certainly depend on how it is managed or handled, this is where professional Mediators or Conflict Managers come in.

Do you need a professional Mediator or prefer your disputes to be settled by Mediation, you are advised to contact Akintunde Esan[8] for further information.


[1] Golding v. Floyd,Supreme Court of Virginia
[2] Galadanchi v. Abdulmalik & ANOR (2014) LPELR-23593(CA) Per Orji-Abadua,J.C.A. (Pp.38-39, paras.B-F)
[3] Ezerioha v. Ihezuro (2009) LPELR (4122) at page 20
[4] Adedeji v. Oloso (2007) 5 NWLR (PT.1026) 123
[5] Woluchem v. Wokoma (1974) 3 SC 153 at 166 the Supreme Court per Ibekwe JSC
[6] Eboigbe v. NNPC (1994) 5 NWLR [pt.346] 649 at 660, per Adio JSC,
[7] SPDC Nigeria Ltd v. Ejebu & Anor (2010) LPELR-5025(CA)
[8] Akintunde Esan is a Legal Practitioner, Legal Consultant and a Chartered Mediator. He is the Managing Partner and Principal Consultant at Ase Olodumare Chambers

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