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.
[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,
[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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