Overview And Analysis Of Part II Of The Arbitration And Mediation ACT 2023

By Babayemi Olaniyan Esq LL.M & Ebunoluwa Yoloye Esq

The Arbitration and Mediation Act 2023(AMA)  was signed into law by President Bola Ahmed Tinubu on 26 May 2023. The Act repeals the country’s 35-year-old Arbitration and Conciliation Act (“Previous Arbitration Act”) and will govern both domestic and international arbitration & Mediation proceedings in Nigeria.

The Act comprises 92 Sections and a schedule to the Act.  It is divided into three parts; Arbitration, Mediation and Miscellaneous Provisions. Part II of the Act comprises 20 sections that provide a comprehensive and unified legal framework for mediation for the first time in Nigeria.

This Article seeks to delve into the provisions of Part II of the Act and x-ray their importance and relevance.

SCOPE OF APPLICATION

The scope of application of Part II is limited to the following:

• international commercial mediation;
• domestic commercial mediation;
• domestic civil mediation;
• domestic and international settlement agreements resulting from mediation, and concluded in writing by parties to resolve a commercial dispute and;
• where parties agree in writing that this part should apply to the dispute.Section 67

Section 67 above is very important and has settled and made in clear terms the type of Mediation that are covered under the Act leaving no one wondering as to the extent of application of the Act. It further re-enforces the fact of party driven process when it states that parties can in their agreement in writing state that this part should apply. Mediators will need to pay very close attention to the agreement of parties when trying to apply this Act. It should be noted that the Act also list the disputes and cases that the Act shall not apply to.

COMMENCEMENT

A mediation proceeding can be commenced either as prescribed by a special statute as a condition for the conduct of a judicial proceeding or when parties have agreed to resolve a dispute with mediation before resorting to judicial or other proceedings.  An invitation to mediate must be accepted by the other party within thirty (30) days from the day the invitation was sent, or within any time specified by the invitation. Where acceptance is not received within the prescribed number of days, it may be deemed rejected.

The Act further provides that parties may have recourse to mediation, regardless of other judicial or arbitral proceedings, before, during or after the initiation of such proceedings. A body also conducting any arbitral or judicial proceeding may recommend mediation where there exists a possibility of resolving the dispute by mediation. The date of commencement of mediation can either be the date the agreement to mediate was drawn up, the date the court made its decision to recommend mediation or the date the Mediator took the first step towards the mediation process. Section 70.

The key as always with Mediation has been flexibility and it is key that the Act has taken into cognisance the fact that due to the essential nature of Mediation, giving room for flexibility will enhance speedy resolution.

SUSPENSION OF LIMITATION PERIOD

The provision of the Act allows for the suspension of the limitation period of a claim when the mediation proceedings has commenced and where the mediation proceedings are terminated without settlement, the limitation period begins to run again. Section 71

This is a laudable provision but may be abused if proper checks are not applied to it. Some parties may take advantage of the pause in the limitation period to delay justice and deprive the other party. To forestall this, it is important that drafters of the agreement must include a time frame for completion of the Mediation proceeding.

NUMBER OF MEDIATORS

The Act states that one (1) Mediator suffices in a mediation proceeding, however, parties are allowed to choose more than one Mediator. Section 72(1)

This provision will seek to save persons who draft inelegant mediation agreements especially with regards to the number of Mediators. By this provision, parties have a sole Mediator save they decide otherwise. The Act is clearly a very updated document that has taken into account current realities.

MEDIATION PROVIDER

The Act provides for the role of a Mediation provider who keeps a list of qualified Mediators for recommendation and appointment by parties. Section 72(2-4)

A huge burden has been placed on a Mediator provider as the Act has clearly spelt out expectations that the Mediator provider must meet and services he/ she may provide.

PROCEDURE AT MEDIATION

Parties are allowed to agree on the procedure they want the mediation proceeding to be held and power is given to the Mediator to conduct the process as deemed appropriate if parties cannot come to agreement on the manner of conducting the process. By virtue of the provisions of the Act, electronic mediation sessions are allowed provided the identity of the parties are ascertained. The Act also permits for the Mediator to make proposals, this was not the position before now, however the Act says same can only be done with agreement of the parties. The Key by virtue of the Act for Mediation are good faith, faith treatment, communication. The Act now embraces the use of electronic means of video conferencing which is in consonance with modern realities. Section 73.

The Act further emphasizes the need for confidentiality and also states the conditions upon which disclosure is permitted. Section 75 & 76 of the Act

Section 77 of the Act expressly provides that no party to a mediation proceeding shall introduce as evidence any document, statement, proposals made during the mediation proceedings, in any arbitral or judicial proceeding. The disclosure of such information shall also not be ordered by any court, tribunal or other government authority and where offered shall be treated as inadmissible.

This provision seeks to further reinforce the confidentiality of Mediation proceedings. It is however not clear the extent to the application of this section. It nonetheless in principle states clearly that whatever happens in Mediation stays in mediation which is ultimately one of the pillars of mediation.

TERMINATION OF MEDIATION PROCEEDINGS

Mediation proceedings shall be terminated in either of the following ways:

• The conclusion of a settlement agreement by the parties, on the date of agreement
• A declaration of the Mediator, to the effect that further efforts at mediation are no longer justified, on the date of declaration.
• A declaration of the parties addressed to the Mediator to the effect that the mediation proceedings are terminated, on the date of declaration.
• A declaration of a party to the other party and the Mediator, if appointed, to the effect that the mediation proceedings are terminated, on the date of declaration. Section 78

This provision creates what is called a declaration. Even though it is not clear the form the declaration should take, considering the nature of Mediation proceedings, a simple easy to read document by the Mediator will suffice.

EXTENT OF POWERS

Unless otherwise agreed by the parties, a Mediator shall not act as an arbitrator in respect of a dispute subject of mediation proceedings or another dispute from the same contract or legal relationship.  It further provides that where parties have agreed to mediate or have expressly undertaken not to initiate arbitral or judicial proceedings, initiation of such proceedings is not of itself to be regarded as a waiver of the agreement to mediate or as a termination of mediation proceedings. Section 79 & 80

IMMUNITY

All Mediators and Mediator providers have immunity in the discharge or purported discharge of their functions except when their action or omission is shown to have been in bad faith. Section 81.

This provision seeks to protect the Mediator from unnecessary litigations and especially when the Mediator can show that his/her actions or decisions were done in consonance with the law.

FINALITY OF SETTLEMENT AGREEMENTS

When Parties conclude on an agreement, the Mediator shall participate in the drafting of the settlement agreement and such settlement agreement shall be binding on the parties and enforceable in Court as a contract, consent judgment or consent award. Section 82.

Section 82 above has further reinforced the finality of settlement agreements. One of the drawbacks with regards to mediation has been the fact that there have been misconceptions as to the finality of the settlement agreements. This Act has clearly taken care of same and made the agreements have a solid backing.

CONDITIONS FOR RELIANCE ON SETTLEMENT AGREEMENTS BY COURT

The requirements for reliance on settlement agreements before the Courts are as follows:

• the settlement agreement signed by the parties; and
• evidence that the settlement agreement resulted from mediation, such as –

(i) the Mediator’s signature on the settlement agreement

(ii) a document signed by the Mediator indicating that the mediation was carried out;

(iii) an attestation by the mediation provider that administered mediation; or

(iv) in the absence of (i), (ii), or (iii), any other evidence acceptable to the Court. Section 83

GROUNDS FOR REFUSAL

The grounds upon which the court may refuse to grant the reliefs provided in the settlement agreement include:

• a party to the settlement agreement was under some incapacity
• the settlement agreement sought to be relied upon

(i) void, inoperative or incapable of being performed under the law to which the parties have validly subjected it, or under the law deemed applicable by the Court

(ii) is not binding or is not final according to its terms , or

(iii) has been subsequently modified;

(c) the obligations in the settlement agreement

(i) have been performed, or

(ii) are not clear or comprehensible

(d) granting relief would be contrary to the terms of the settlement agreement or

(e) there was a failure by the Mediator to disclose to the parties’ circumstances           that raise justifiable doubts as to the Mediator’s impartiality or independence and the failure to disclose had a material impact or undue influence on a party without which failure that party would not have entered into the settlement agreement. Section 84

APPLICATION OF THE SINGAPORE CONVENTION

The Act provides for the application of the Convention on International Settlement Agreements Resulting Mediation (Singapore Convention) where the enforcement of an international settlement agreement made in a State other than the Federal Republic of Nigeria is sought, provided that the State is a party to the Singapore Convention and the difference arises out of a legal relationship, whether contractual or not, considered commercial under the Laws of Nigeria. Section 87

A major commendation for the  Act is the fact that it provides a comprehensive legal framework for the mediation in Nigeria for the first time. This law demonstrates the country’s commitment to strengthening its reputation and further promoting the use of alternative dispute resolution within its borders.

The inclusion of the role of Mediation provider allows for parties to have a wider pool of competent Mediators to choose from and this will make the mediation process more reliable.

Additionally, the inadmissibility of any evidence or testimony given by any party to the mediation in a court proceeding allows parties to participate without restriction,  thereby resulting in a more successful mediation proceeding.

The introduction of electronic mediums for hearing of Mediation is very commendable and will increase the usage of mediation as a means of resolving disputes.

The inclusion of Section 87 of the Act further solidifies Nigeria’s position with regards to the Singapore convention. It further brings to light the fact that Nigeria is open to international transactions that may be resolved by Mediation and the Singapore Convention which is globally recognised, will apply.

The Act is however silent on the position of legal representatives in the Mediation process. The Act does not expressly ban or approve of the presence of legal representation in mediation proceedings.

In conclusion, except for the provisions of section 73(3) of the Act which seeks to maintain fair treatment of parties by the Mediator, the parties may agree to exclude or vary any of the provisions of Part II which further emphasizes the essence of party driven process. The Act is just a guide. Parties still have the right and opportunity to amend and or dictate the course of their Mediation process.

Caveat!

The content of this article is for educational purposes and is intended to provide a general understanding of the topic discussed.  It is not intended to serve as legal advice whatsoever. If the contents appeal to you and you would want further clarification on any of the points raised therein, do not hesitate to reach out to our team.

Contact us: Lehi Attorneys, info@lehiattorneys.org. 08134699398

Credit:Simplylaw