“If a man empties his purse into his head, no man can take it away from him. An investment in knowledge always pays the best interest.”

Ben Franklin

After months of back end activities, we are glad to be back. Our time off was spent repackaging what promises to be an expanded and more interesting column on alternative dispute resolution processes. We shall no longer restrict our focus to mediation. We shall henceforth examine the entire gamut of the ADR spectrum; beaming our searchlights on other processes such as arbitration, conciliation, early neutral evaluations and a lot more. This new thinking is informed by an incident that strongly suggests that our readers will be better served if they have a working knowledge of all that is considered as alternative dispute resolution

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Emmanuel Ghamd (not real names) has in the last fifteen years been engaged running a thriving international business.   Just about two years ago, his business got caught up in a dispute with the local offices of an international partner.  In the course of the disagreement the business partner proposed a mediation of the dispute. Emmanuel was advised to decline mediation, since according to his lawyer mediation was an ineffective process.  Shortly afterwards he filed a suit at the Lagos High Court.  The suit was thrown out of court because a clause in the contract between the parties contained a three-tier dispute resolution clause. In the said clause, it was expressly agreed that in the event of a dispute, parties were to first to engage in negotiation, mediation and or Arbitration in that order of priority. Every next stage of the three-tier clause was to be triggered, if the preceding stage failed to resolve the dispute. Having failed to get Emmanuel to table for negotiation, the opposing party had referred the matter to a mediation Centre for resolution. This was the opportunity Emmanuel missed by declining to mediate.  One mistake society continues to make is to undermine the judicial enforceability of a mediated settlement. Formal mediation must no longer be equated with mediation at its social origins where it was a mere gentleman’s agreement. Once there is evidence before a court of law that a settlement agreement had been reached in a formal mediation in which all the safeguards of neutrality and voluntariness have been observed, courts are wont to treat the outcomes as consent judgment that carries the full weight of a judicial or conventional court judgment.

As it is now, Emmanuel is left with only one option – to proceed to arbitration which is more often than not an expensive process. This sad narrative is the trigger for our new focus. Yes, it is true that mediation is more readily usable and should be attempted as first option. Nonetheless, there are certain questions and or benefit which only the arbitration process can afford a disputant in certain circumstances. If Counsel in the matter under reference had bothered to review the contract before furnishing that inappropriate advice, he should perhaps have remembered that once a contract provides for arbitration, parties are left with no choice but to comply. It is mandatory. On the contrary, parties to mediation which is faster, consensual and more cost effective cannot be compelled. Both parties must of their own free volition submit themselves to the process. Because discerning parties know that no one appeals a successful mediation, they are wont to do all within their powers to convince opposing parties to come to mediation. The task of persuading the other party to come to the mediation table is automatically removed where mediation and arbitration are together provided in the dispute resolution clause. It becomes as clear as crystal to the other party that where he or she declines mediation the next obligatory step is the more expensive and technical process of arbitration. Indeed at some international fora arbitrator organizations now routinely provide for mediation as a necessary first step to engaging arbitration. This they do, whether or not such is provided for in the contract. The usual approach is to advice parties on the need to first give mediation a try. Parties are assured that where for any instance the option fails, resort could still be made to arbitration. Anecdotal evidence indicates that the early promise of arbitration as a factual non-legalistic process of amicable dispute resolution has since been lost to the legalization gene with which it has infected it. With the dominating numbers of lawyer arbitrators and counsel, much of arbitration processes are now routinely challenged at interlocutory levels. The confidentiality provisions in arbitration also stands the risk of being thrown overboard at any time a party to the dispute challenges the arbitral award in court. Notwithstanding its identified weaknesses however, arbitration still retains the appeal of being recommended in big complex disputes and those for which a little coercion may serve as incentive.