Tolu Olatunji is a seasoned lawyer, arbitrator, mediator, researcher and a notary public with wide range of experience in financial services, commercial transactions and general dispute resolution. He leads Edge Hill LP, a Corporate/Commercial and Dispute Resolution firm in Ibadan, Oyo State, Nigeria. He enjoys music and water sports. In this Conversation with ‘Tosin Ajose Popoola, he provided a rich and robust insight into Arbitration, its peculiarities and our failure as a Country to fully utilize Technology to its tilt.
DNL L&S: You have a rich background in Commercial Litigation, what led you here (i.e. Arbitration)?
Tolu: My foray into arbitration started during my LLM class in 2011 where I took arbitration as a course for a semester. I got more curious and started researching further on arbitration and other ADR tools. I went on to become a member of the Chartered Institute of Arbitrators with certification and trainings.
There are many reasons, first, as a dispute resolver who thinks globally, I find arbitration attractive because it is still the preferred tool for resolving cross-border disputes. With the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, arbitration became borderless, hence arbitral award can be enforced in a court situate in any of the contracting parties’ State subject to the requirement that the award is not against the public policy of the place of enforcement among other requirements.
Another attraction to arbitration is that one of the elements of arbitration is finality. What this means is that an arbitral award is final. Unless otherwise agreed by the parties, the award of arbitral tribunal is final, it cannot be appealed. While it can be challenged on some specific grounds, the courts are not allowed to go into the substance of the subject matter of an arbitral award.
Also, most complex commercial contracts involving big corporate entities often cuts across more than one country, these entities prefer arbitration due to the Confidential nature of same. Court processes are public record and can be obtained upon a proper application for same. Arbitration on the other hand is confidential and not open to the public. Parties, arbitrators and any other participant in the processes are often required to sign non-disclosure agreements to ensure that whatever issues, trade secrets and personality that may be involved in the process are kept confidential and not made public. Generally, some companies would rather not have their names involved in multiple litigation hence the choice of arbitration.
Litigation is often bedeviled with technicalities that can sometimes deny justice to a litigant even when he/she has a good case. All it takes sometimes is a silly error from counsel. The strict rules of evidence do not apply to arbitration and a good arbitrator will always ensure that all the equal opportunities are given to each party to arbitration without allowing technicality defeat the purpose, which is justice to both parties.
Finally, arbitration can be fast, way faster than litigation and when you save time, you can save money too because as they say, time is money. The above reasons and of course my curiosity for a broader set of dispute resolution skills led me into arbitration.
DNL L&S: Having explored both sides i.e. Litigation and Arbitration, what’s the key difference? Is there any Procedure or Mechanism in Arbitration that can be adopted in Litigation for the ease of resolving dispute?
Tolu: In arbitration, parties choose their arbitrator except they hand over that power to an appointing authority. Arbitral awards are final and not subject to appeal, arbitration is also confidential. These are some of the differences, I will however now go into details in respect of some of the differences that can be beneficial to litigation.
Litigation is guided by strict procedural laws and rules that are sometimes astounding for lack of better words. For example, the rule in Okafor v. Nweke (2007) which states that court processes must be signed by a human lawyer called to the Nigerian bar and not in the name of a law firm; many cases, that had spent several years in different courts, were struck out on the basis of this rule, when a simple option of correcting the anomaly would have sufficed. While arbitration is guided by laws and procedural rules too, prior awards are not binding on arbitrators thus we can say that technically, arbitration does not follow precedence like its counterpart; litigation. The fact is, not all precedents are good precedents and as its often said, the Apex Court is not final because it is infallible, it is infallible because it is final, thus even when a precedence is patently bad, a lower court is bound by such precedence. This is not so with arbitration as each case are handled based on their peculiarity.
While there are judicial authorities to the effect that the court should focus on substance and not mere technicalities, more needs to be done in the way evidence is admitted and situations such as Okafor v. Nweke mentioned above. The National Industrial Court for example by its law does not adhere strictly to the Evidence Act. This comes as no surprise because the court had long ago embraced ADR, especially arbitration even before it became a court of record.
On another note, I have seen judges list cases involving, criminal matters, banking and financial disputes, tenancy related cases, matrimonial disputes, chieftaincy disputes, land disputes, breach of contracts among others on the same cause list for the same day. A judge will move from one case to another case with very different subjects and issues, I personally pity them. This is even more so, when a Judge is hearing a dispute in respect of banking transactions and there are technical points being made by a witness but the Judge is lost because he/she does not understand. This is not so in arbitration as enough time and focus is dedicated to proceedings on each case. Also, arbitrators are often selected based on technical qualification and experience, hence arbitral tribunal sitting on a construction dispute will ideally have a Civil Engineer on the panel. The freedom the parties have to choose their arbitrators gives them the opportunity to pick an arbitrator most suitable for their kind of dispute.
Having a judge or arbiter that understands or that will not struggle to understand the technicalities of a subject in dispute will enhance the outcome of the whole process. There are specialized courts in Nigeria but there is a need to do better case management to limit the types of disputes different courts will focus on and more training for Judges peculiar to their assigned core competencies.
Another major point is the use of technology. Pleadings, notices and most correspondences in respect of an arbitral proceedings are shared via electronic mail and there are online arbitration and mediation services. Though many other countries have embraced technology even in litigation, Nigeria is catching up on that. There are pockets of active rulings by some judges for example allowing service of processes via Facebook. For instance On 2nd February, 2020, Hon. Justice O.O Ogunjobi of the High Court of Lagos State in VIZADA NETWORKS v. ITCLICK NETWORK LIMITED & ORS granted an order of substituted service on some of the Judgement debtors in the garnishee proceeding via Twitter, LinkedIn and Facebook.
Finally, and on a lighter note, I think it’s time to do away with the wig and gown we wear at the superior courts.
DNL L&S: You practice in Ibadan, Oyo State of Nigeria, what’s the reception of Arbitration there? Are people embracing it genuinely? Is it solving the problems it portrays itself capable of solving? Do we have enough Practitioners with the requisite knowledge?
Tolu: The opportunities for arbitration practitioners in Nigeria are not very many at the moment and it doesn’t matter that it is Ibadan or anywhere else. Many people, including corporate entities want to embrace arbitration until arbitrators name their fees and they are shocked at how much they are expected to pay. I was meant to be at a proceeding in Lagos in January this year but the claimant withdrew the claims a week to the date. The truth is, the cost of arbitration is a major concern with regards to reception. While it is great to engage arbitrators that are well experienced, they don’t come cheap.
Last year, a chapter of the Chartered Institute of Arbitrators was inaugurated in Ibadan and the number of trained and certified arbitrators is increasing, the level of experience is however still low. Low because Nigeria is very hierarchical with opportunities generally, and the cost of running a private dispute resolution solely at the expense of the party is still a strange idea to many who are used to bearing only the cost of their lawyers in court. In other to enjoy the party autonomy and other perks of arbitration, the parties will bear the cost of the arbitrators, the proceedings, experts where needed, arbitral secretary among other things, this tend to make the cost excessive to some, especially if they do not fully appreciate the benefits. Though a gradual process, it is expected that with more awareness, more people will come around.
Like I earlier said, Nigeria is very hierarchical with opportunities and this has led to instances of people without proper training in arbitration taking up references because they are trained in some other ADR tools and these unfortunately leads to a bad outcome with a party challenging the award due to misconducts of an untrained arbitrator. However, the number of trained and ready arbitrators is growing. There are many trained, certified arbitrators though not as many are experienced.
DNL L&S: What distinguishes Arbitration from other forms of ADR?
Tolu: It’s the way arbitration works! Parties choose an arbiter who sits on their dispute and decide one way or the other in a judicial manner but of course it is not a court of law. Other ADR tools are not so, they are mostly assisted negotiations where parties are assisted in viewing their disputes from a different point of view in other to be able to come to an agreement. In mediation in particular, parties will be the ones to come to a resolution while the mediator only facilitate the process.
Another point is that Arbitration is the most developed ADR mechanism, it has been around for a long time and there are well established laws and regulations on arbitration in most parts of the world. Also, the element of finality in arbitration makes it different from other ADR tools.
DNL L&S: Regardless of the popular slogan of ADR being cost effective, we know that Arbitration is in a class of its own, and cannot be considered to be cheap or economical by any standard. What are your thoughts please?
Tolu: You used the terms cost effective, cheap and economical. Is ADR generally cost effective? The answer is yes, it can be, if done right. Is Arbitration cheap, definitely not and neither is litigation. Is Arbitration economical, I will say again that yes, it is, if done right.
With arbitration, the parties elect to bear the cost of the whole process of settling their dispute, thus, you will expect that they will spend more than they would spend, in a regular court. Without a doubt the cost of arbitration discourages very many people and the issue is a lot deeper than arbitration in itself. But the time it saves can be measured in terms of money.
Top businesses that are mindful of time wasted in court and the need to protect their image and business ‘secrets’ will definitely find it economically wise to opt for arbitration, so it is relatively economical. The top countries in arbitration that house the preferred seats of arbitration around the world such as London, Singapore, Paris, Hong Kong, Geneva, New York are all well developed Countries economically and infrastructure wise. In essence, the economy of an environment also goes a long way in how arbitration is perceived. Locally, most arbitrations are done in places like Lagos and Abuja. This points to the fact that the problem may not be that arbitration is too expensive, but that the economy of a particular place is not doing too well.
DNL L&S: Considering your background in Litigation what’s the major difference with Arbitration in terms of output, productivity and reward for both Practitioners and the end users?
Tolu: Output, productivity and reward. More and more lawyers in Nigeria are running from litigation not because of the lack of ability or capacity, not even for lack of interest but mainly because of the sheer waste of time and energy. I was out of the State for a case recently and I was stuck in court from 9:00 am till 3.30 pm just to withdraw a suit. It was an application that took less than 5 minutes but I sat in court for several hours because there were senior counsel in court. This among other time-wasting consequences of litigation makes it sometimes uninspiring.
With arbitration on the other hand, the process can be more organized and some things can be done remotely, I was listening to a senior Ghanaian arbitrator two days ago who stated that all the awards he has ever published were sent to parties via email and hard copy sent via courier without any need to sit for hours to read a judgment like its done in litigation. Arbitration aids productivity.
As per reward, the big arbitrators are very rich people (laughs). On a serious note, with patience and persistence I believe the reward comes in any chosen endeavour. This is also so in arbitration.
DNL L&S: ADR and indeed Arbitration prides itself as a dispute resolution mechanism of choice for Commercial Transactions all over the World. How are we (i.e. Our Arbitration) faring as a Nation? In terms of Law and Practitioners.
Tolu: To be honest, there is a lot to be done in the law, education, and judicial infrastructure. The current law on arbitration in Nigeria is the Arbitration and Conciliation Decree (now Act) of 1988. It is basically an adaptation of the UNCITRAL Model Law of 1985 (it was amended in 2006) and the New York Convention earlier mentioned. The law is outdated and a Bill is currently at the National Assembly to amend it and bring it more in tune with recent realities in arbitration.
Arbitration relies on the judiciary for assistance at some instances and particularly when it comes to enforcement or challenge to an award. Where the judges are not knowledgeable in arbitration, a lot can go wrong and the world watches how national courts manage arbitration. One of the attractions to a Seat of arbitration is a judiciary that aids arbitration. And it is worrying that not many judges can be said to truly understand arbitration as a whole and not just the locally enacted laws.
In a recent judgment by the High Court of Lagos State in Global Gas and Refinery Limited v. Shell Petroleum Development Company, the High Court took a troubling position to the effect that once an arbitrator’s appointment is challenged, the arbitrator should recuse himself or herself. This is definitely not and cannot be the position of the law because an unserious party only needs to challenge every appointment just to avoid an agreement to resolve dispute by arbitration. This is just an example of the chasm in training, education and judicial infrastructure.
There are also instances of obtaining an award and being unable to enforce it because of the time it can take to resolve a challenge to the enforcement of the award. While there are well qualified practitioners, there is a gap of experience and adequate support from the judiciary and even the legislature.
DNL L&S: Do you think our Laws both Domestic and International have evolved and utilized Technology to its fullest?
Tolu: Arbitration is generally governed by laws, rules, conventions, and practices especially as it relates to the Industry of the subject of the dispute referred to arbitration. Often times, except for pre-hearing meetings and taking evidence, most other activities in the process are done remotely with the use of electronic communication.
Using technology to the “fullest” is another issue entirely as this may delve into using AI to resolve disputes, but I believe that institutions such as the ICC, London Court of Arbitration and CIArb., are always developing rules, protocols and practice guidelines that embrace the use of technology. Domestically, the Federal Law is from 1988 so you can imagine, but the nature and practice of arbitration encourages the use of technology. If the nature of the dispute permit, meetings can be held virtually and as earlier mentioned, awards can be published by simply emailing them to the parties.
DNL L&S: Was the ADR Industry and her Practitioners fully prepared for the outbreak of Covid-19? Do we have Laws and Regulations that envisaged such an occurrence?
Tolu: With the way the whole world has been brought to its knees by the virus, I do not think anyone was really ready for what we have been seeing. But some countries are handling it better than others and I don’t think Nigeria is doing well in this regard. For example, the Court of Appeal in Kenya has delivered 57 judgments via video link due to the isolation being observed and all the judgments are available on the “eKLR” website within 48 hours. Meanwhile many courts in Nigeria will deliver judgment even when the world was not on lockdown and it may take months to get a copy of such judgment. As earlier stated, arbitration often needs the court, so how do you even proceed when the courts are shut.
The practice of arbitration makes it possible for things to be done virtually, however the infrastructure to successfully do that without an impasse is another thing entirely.
DNL L&S: Have we learnt our lessons from this Pandemic?
Tolu: I think everyone is learning from this. A lot has been exposed by the situation and I really hope that we don’t go back to business as usual when this is over. I have been in 2 seminars and a meeting via Zoom since the lockdown and I have seen some online hearings (not in Nigeria) via Zoom too. The restriction of movement is showing us how much we can do without having to travel or fly miles. And with 5G technology in the works, the possibilities are unimaginable. I really hope that as a nation and people we choose to learn and develop necessary ICT infrastructures.
DNL L&S: As a Practitioner, what major lesson have you learnt from the Covid-19 outbreak in terms of utilization of Technology and the likes?
Tolu: Stemming from what I stated earlier, there are a lot of things that can be done without having to travel miles. I was in a seminar organized by the Association of Young Arbitrators with facilitators from the UK, Nigeria and Ghana that lasted 5 days. I gained more from the sessions than I did in some conferences and trainings I have attended. I was also in a round table meeting of mediators in America for a couple of hours.
The question that will come to mind going forward is: can it be done electronically? And the truth is, many things can be done electronically and the infrastructures can only get better.
DNL L&S: Back to our Laws (i.e, the Laws that governs Arbitration), would you call for an amendment? If Yes, what areas and to what end?
Tolu: Like I said earlier, there is a Bill currently at the National Assembly to amend the Arbitration and Conciliation Act. The amendment includes issues such are the incorporation of the 2006 amendments to the UNCITRAL Model Law, Emergency Relief Proceedings, expansion of electronic communication, application of statutes of limitation, consolidation of hearings, joinder of parties, among other things.
However, the amendment I will call for is a constitutional amendment to limit appeals on arbitration related matters and/or a practice direction or policy by courts to fast track arbitration matters like we have in criminal cases.
DNL L&S: What’s the terrain like especially for a young Practitioner?
Tolu: Tim Hardy FCIArb., an English independent arbitrator and mediator once told me that the major problem for young arbitrators in Nigeria is that our system is too hierarchical and I agree with him. It is even more difficult when you do not work with a really big law firm with arbitration as a core practice area. It is a circle, a really small one at that. I have met many really young practitioners in Kenya with real experiences in their 20s and 30s. This is very rare in Nigeria.
A young practitioner who is determined should be ready to invest time and money in trainings, certifications, volunteering and networking for a couple of years before you can think of reaping real benefits. It is just the way it is. Focus, patience and consistency.
DNL L&S: How expensive is it, in terms of training and the requisite certification?
Tolu: The Chartered Institute of Arbitrators have different trainings and certification programmes. For example, the membership course is One Hundred and Seventy-Five Thousand Naira. There are also other trainings organized by the institute and some other bodies like the ICC. The ICMC and the Lagos Multi-Door Court house also do trainings and certifications for mediators. With some hundreds of thousands of Naira, one can get these trainings and certifications.
Tolu can be reached vide Email at email@example.com
‘Tosin Ajose Popoola, Tosin is a Lawyer, Content Creator and Blogger she practices in Ibadan, Oyo State.