Wanted: Judiciary That Aids Economic Growth


    Despite efforts, delay in administration of justice just won’t go away. According to the Chief Justice of Nigeria (CJN), Justice Ibrahim Muhammad, the slow pace of justice dispensation is preventing the sector from playing its required role in economic development. ADEBISI ONANUGA examines the problem and the way out.

    Last Thursday, the Chief Justice of Nigeria (CJN) Justice Ibrahim Muhammad bemoaned the delay in justice delivery, noting that it accounts for the Judiciary’s inability to effectively contribute to economic development.

    Justice Muhammad spoke at a national workshop for judges on recent reforms of the Banking and Financial Services Sector in Nigeria: Bank and Other Financial Institutions Act (BOFIA) 2020 in focus, organised by the National Judicial Institute (NJI), in collaboration with Juris Law and the Central Bank of Nigeria (CBN).

    He noted that disputes were unavoidable in business transactions and other related economic activities, but lamented that it would be scandalous if cases arising from failed business transactions lingered for years in court without resolution.

    The CJN urged judges and judicial stakeholders to devise prompt dispute resolution mechanisms, saying an effective judicial system was a catalyst for financial system stability, which often translated to economic growth.

    “The Judiciary is a critical stakeholder and a necessary partner in the enhancement of financial stability of any country,” he said.

    He added: “If the Judiciary must play its role in financial stability in Nigeria, cases of delay must be aggressively and frontally addressed so that parties would get justice at the end, and the resultant effect of this would raise public confidence in the Judiciary.

    “One of the key factors that will aid the Judiciary in carrying out its assigned responsibilities and essentially ensuring financial system stability is for judicial officers to embrace case management in their courts and thereby aid speedy dispensation of cases in their dockets.”

    The CJN has a point. But observers have pointed out other factors also responsible for the Judiciary’s seemingly inability to contribute to economic development, such as poor enforcement of the rule of law in commercial activities.

    ‘Independent Judiciary leads to rapid growth of small and larger businesses’

    Professor Emeritus of American and Foreign Law, Senior Lecturer, The University of Chicago Law School and Senior Fellow at The Brookings Institution, Kenneth W. Dam, observed that a sound judiciary backed by proper enforcement of the rule of law was critical for businesses to thrive.

    Dam, in a Chicago Law and Economics Working Paper No. 287, published in 2006, noted that while some technical laws can be enforced by administrative means, the rule of law – in the primary economic sense of protecting property and enforcing contracts – requires a judiciary to resolve disputes between private parties.

    He said no degree of substantive law improvement, even world “best practice” substantive law, would bring the rule of law to a country without effective enforcement.

    Dam noted that one conclusion widely agreed on, not just in economic circles but also among lawyers and legal scholars, was that the judiciary is a vital factor in the rule of law and more broadly in economic development. He said several studies showed some of the positive benefits of strong and effective judiciaries. According to him, the degree of judicial independence is correlated with economic growth. He said a stronger judiciary was usually associated with the more rapid growth of small firms as well as with larger firms in the economy.

    ‘Better courts reduce firms’ risks, increase willingness to invest’

    Dam also stated that economic studies showed that within individual countries, the relative competence of provincial and state courts affected  comparative economic competitiveness, adding that better courts reduced the risks firms face, and so increase the firms’ willingness to invest more in the economy of the country they operate.

    Why govt seems to be ignoring commercial disputes

    Kemi Pinheiro (SAN), Ogbonna Chukwumerije and Sodiq Lawal argued in an article published in The Nation last month and entitled “Effective judicial system: A catalyst for economic growth” that successive governments in Nigeria do not place much importance on commercial disputes, which have continued to linger in various courts across the country despite the undeniable role an effective judiciary plays in ensuring economic growth.

    According to them, it appears that the different arms of the Nigerian Government do not appreciate the role a quick, effective and efficient dispute resolution mechanism plays in the economic development of a country.

    Judicial efficiency measured by trial length

    The trio emphasised that a well-functioning judicial system was indispensable to business activities and to society as a whole. Judicial efficiency measured by trial length, one of the essential factors in the effectiveness of the justice system, ensures contract enforcement, which is the basis of market transactions, they said.

    “Judicial efficiency is closely associated with accessibility to judicial services and the certainty of an efficient judicial system raises people’s confidence.”

    They noted that one of the factors that discouraged investment, particularly foreign investment, in developing countries, was the absence of an effective and reliable dispute resolution mechanism. Judicial efficiency, they added, is closely associated with accessibility to judicial services and the certainty of an efficient judicial system raises people’s confidence.

    ‘Time is money’

    They noted that while it was almost impossible to avoid disputes in commercial ventures, an investor was concerned about the mechanism in place for resolving any disputes that may arise in the course of his business.

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    The popular phrase ‘time is money’, they said, cannot be over-emphasised. No investor is willing to tie down money, capital or investment for an unascertainable period due to commercial disputes. The fear is usually that the investment and/or capital would have lost its value at the time the dispute is eventually resolved.

    “Thus, investors would be averse to investing funds in any country where dispute resolution is not reliable, effective and/or efficient. This is the case of the Nigerian judicial system. Many investors and investment have been lost over the years as a result of the failure of successive governments to pursue efficient and/or effective judicial reforms.”

    They also observed that court-related litigation in Nigeria was majorly characterised by three (sometimes four) stages, commencing from the trial courts, then the appellate court and then the Supreme Court.

    They noted that the journey to the Supreme Court in a commercial dispute “could last for as long as eight to 20 years.”

    In Bilante Intl Ltd v. N.D.I.C (2011) LPELR-781 (SC), for instance, the suit was commenced in 1992 and it continued till June 2011, when the Supreme Court delivered its judgment. Also in Edilcon (Nig) Ltd v. UBA PLC (2017) LPELR-42342 (SC), the decision of the trial court was delivered in December 1997, whilst the decision of the Supreme Court was delivered in May 2017 – about 20 years after.

    “It is quite disheartening that, over the years, the heads of the various courts have failed to enact measures geared towards decongesting the dockets of the courts, or even where enacted the measures have proved ineffective, thereby increasing the time span of cases and reducing the confidence potential investors will have in the judicial system,” they said.

    Delay in justice dispensation must be addressed 

    Many stakeholders and commentators at different fora decried the menace of delay in dispensation of justice in Nigeria. Justice Niki Tobi of blessed memory once observed that one perennial problem in the administration of justice in any legal system was the question of delay.

    “There is so much delay in the administration of justice in Nigeria that one wonders whether the parties get value justice at the end,” Justice Tobi said.

    Pinheiro and others stated that where litigation takes six years or more to be completed in the High Court is not good enough. They argued that cases of delay must be addressed if the rule of law was to have any meaning, and that more often than not, the investment at stake or money in dispute would have depreciated such that the successful party would gain no benefit from the judgment.

    Why arbitration hasn’t solved the problem

    They lamented that alternative dispute resolution had not solved problems of an inefficient and ineffective judiciary.

    They noted further that most arbitrated matters ended in courts either for enforcement of awards or to challenge the arbitrators or their jurisdiction among other things. To buttress their views, they cited the cases of Sundersons Ltd & Anor v. Cruiser Shipping Pte Ltd & Anor (2014) LPELR-22561 (CA); North Pole Navigation Co. Ltd v. Milan (Nig) Ltd (2015) LPELR-25865 (CA).

    In these situations, the arbitration or other alternative dispute resolution mechanism is also hampered by delay and inefficient judicial system.

    “It is quite incredulous that successive governments in Nigeria have failed to make concerted efforts to reform the Judiciary. It will be recalled that when the politicians were faced with the possibility that the period for the determination of pre-election and election matters would linger at the tribunal for a long time because of the rot in the judicial system as in the case of Ngige v Peter Obi (2006) LPELR-12920, immediate and urgent steps were taken to amend the Constitution to ensure that election matters are determined expeditiously and within a Constitutionally guaranteed time frame (See Section 285 of the Constitution).

    “In fact, sanctions are meted out by the National Judicial Commission to judges who fail to determine election matters within the time prescribed by the Constitution.

    “The lethargic attitude of the government in ensuring the speedy determination of civil (commercial) cases can be seen from the failure of the Courts to enforce the provisions of Section 53 of the Asset Management Corporation Act of Nigeria (Amendment No. 2), 2019 which seeks to ensure that all AMCON related matters are determined within the time explicitly stipulated in the relevant provision of the Act. Unsurprisingly, unlike matters bordering on election matters, there has been no enthusiasm or zeal to ensure the speedy determination of AMCON matters.”

    What must be done

    The problems are obvious, as are some solutions. Are there others? A former Nigerian Bar Association (NBA) President, Dr Olisa Agbakoba (SAN); Pinheiro, a former General Secretary of NBA, Dele Adesina (SAN) and Dr Fassy Yusuf shared more insight.

    Govt must ensure expeditious, fair administration of justice

    Agbakoba argued that the judicial system “to everyone’s knowledge has completely and utterly failed.”

    He blamed this on the Judicial authorities’ failure to “do anything about it.”

    Agbakoba said: “I have spoken about this for 30 years. The only exceptions that worked on judicial reforms in relation to the speed of justice were the late Chief Judge of Lagos State, Justice Samuel Ilori, who, under my consultation with the British Council, introduced the front loading procedure. The other judicial officer was the late Chief Justice Dahiru Musdapher, CJN, as he then was. He appointed me to produce a radically new set of civil procedure rules, but this was not implemented as he served for only six months. There were of course some other judicial officers who introduced reforms, such as Chief Judge Roseline Ukeje of the Federal High Court and Chief Judge Ibrahim Auta, also a former Chief Judge of Federal High Court.. But that is it really. “ 

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    NJC’s ‘failure

    Agbakoba lamented that the NJC, constitutionally charged with judicial reform, “has done nothing.”

    He added: “The result is a sad decline in the Judiciary’s ability to discharge its function to effectively and efficiently resolve disputes. This is a failure that requires urgent attention otherwise the relevance of the judiciary in the eyes of the public will continue to be questioned. It is not rocket science to modernise the Judiciary and this is a reasonable expectation. The NBA needs to push this process vigorously”.

    Reform the Judiciary 

    Pinheiro noted that a functional judicial system played a major role in society in maintaining not just law and order but boosting the economy. He advised that government must “as a matter of great importance” take active steps towards reforming the judiciary to ensure the expeditious and fair administration of justice.

    He said: “No serious nation prioritises matters relating to the elections over the economy. An efficient judicial system provides the framework for stability and economic development.”

    Amend court rules

    Pinheiro advocated for robust and holistic amendments to be carried out on the rules of procedure for various courts to extricate provisions that facilitate the delay of court proceedings and include provisions that encourage virtual and information technology mechanisms.

    Appoint senior lawyers as judicial commissioners

    He suggested that government should encourage and implement the appointment of senior lawyers as judicial commissioners or on an ad-hoc basis at the different levels to immediately dispose of procedural and non-contentious interlocutory applications.

    Prompt dispute resolution: catalyst for economic development.

    Adesina argued that the type of dispute resolution mechanism that could hasten the resolution of failed financial transactions and business disputes was arbitration and conciliation.

    “Our law has made adequate provision for this as a means of alternative dispute resolution mechanism under the Arbitration and Conciliation Act Cap A18 Laws of the Federation 2004,” he said.

    The Silk regretted that the conduct and attitude of concerned stakeholders had “jeopardised the law from achieving its set goal and objective.”

    Like Pinheiro, Adesina noted that a good number of cases before the courts from the High Ccourt to the Supreme Court were challenging the enforcement of one arbitral award or the other, some of them on very flimsy and frivolous grounds, even when the provisions of the Arbitration and Conciliation Act are clear on the finality and binding force of the awards of Arbitral Tribunal and the very restrictive and limited grounds under which one could apply to set aside those awards.

    “We know for a fact that it is faster and it meets the exigencies of speedy resolution of commercial disputes and other financial transaction disagreements.

    “Regrettably, this objective has been largely defeated in Nigeria despite the sustained efforts of our courts to recognize and enforce those awards while rejecting in most of the cases the various attempts of contractual parties to resort to litigation which they had earlier rejected as a means of resolving their disputes under their contractual agreements,” Adesina said.

    He noted that there were cases where parties voluntarily and expressly agreed to refer their disputes to Arbitral Tribunal to be constituted under the Act. “A dispute will arise, both parties will appoint arbitrators, both parties would participate at the arbitral proceedings and awards would be rendered. What happens thereafter is that the dissatisfied party will turn the arbitration as a starting point for his litigation which may last between 10 and 20 years.

    “Of course, this prolongation and endless litigation does not advance the business interest of the parties in any way or the economic interest of the nation as a whole.”

    ‘Party challenging arbitral award should deposit award in interest-yielding account’

    “It is on this note that I propose an amendment to the Arbitration and Conciliation Act that will make it obligatory that any party who is challenging an arbitral award must first and foremost deposit the award into an interest yielding account in the bank while pursuing the application and appeal to set aside the award. The winning party at the end of the day will go with the money. By so doing, many cases arising from arbitral awards will go.

    “Of course, the purpose of arbitration will also be achieved very substantially. After all, it is a fundamental principle of our law that not only is a judgment creditor entitled to the fruit of his judgment, but also, appeal as a matter of general principle does not operate as a stay of execution. Some disputes may still have to be litigated in which case speed in the determination of such dispute will still be necessary.

    Factors responsible for slow administration of justice 

    Adesina also noted that the attitude of many practitioners contributed to slow administration of justice and that this manifested in many areas. He listed them to include: “endless preliminary objections warranting endless rulings or in some cases adjournments; frivolous interlocutory appeals; application for stay of proceedings; frivolous adjournments; petition against Judges and opposing counsel; lack of technology to proceedings; lack of proper apprehension and/or political will to enforce the Rules of Procedure such as personal liability of counsel for cost for any infraction of rules of practise that jeopardises speedy trial and inadequate funding.”

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    Inadequate funding

    According to him, inadequate funding is a cankerworm that has eaten deep into the administration of justice in Nigeria.

    “A judge once told me that the salary of judges is an incitement to corruption. He wondered why the country failed, refused or neglected to adequately fund justice administration, particularly now that we are operating a constitutional democracy.

    “A critical appraisal of budgetary allocation to the judiciary and administration of justice in Nigeria in comparative terms with other sectors of the economy will demonstrate absolute lack of priority attention to the justice sector.

    “A speedy, efficient and effective administration of justice that everybody can be proud of, that the investors both local and foreign can rely on and trust can only be achieved if we practically, functionally and realistically address the above challenges with relevant determination to make a change”, he said, adding “nothing works by itself, things are made to work.”

    Why judiciary cannot contribute to economy

    According to Yusuf, the Nigerian environment is one of the worst in resolving disputes arising from business transactions “and this should not be because our jurisprudence was taken from Britain and it has exposure to American jurisprudence, to Canadian jurisprudence, to French jurisprudence, German jurisprudence, Asian jurisprudence.”

    He said these are countries people want to do business with because they believe in justice without delay “and as you know too well, Justice delayed is justice denied and that is why no matter what the federal government is doing about the ease of doing business, if the issue of dispute resolution is not addressed, we would continue to find it difficult to have an inflow of foreign direct investments. Even those already in the country are taking flight and that is why you see many countries moving to Ghana and elsewhere where disputes can be quickly resolved.

    “You can imagine a business dispute, a shipping dispute, a dispute arising from airline business dragging for 10 years. Most people would lose fate in the judiciary. To my mind, all these should be eradicated and if they cannot be fully eradicated, they should be curtailed to the barest minimum.

    The way forward

    He advised that the NJC and indeed, the National Assembly should devise strategies and mechanisms to promote these resolutions. “It is not only the judge that would have to do this, it is going to be a collectivity, it is going to be the body saddled with the responsibility, that is the top echelon of the realm, the judiciary. And to do this, the National Assembly, the law-making body of the government, the state assembly should come to the aid of the judiciary”, Yusuf argued.

    Review laws on arbitration

    He also advised that the provision for arbitration in statute books, the laws of the federation, the laws of the states, should be re-jigged and should ensure the incorporation of Alternate Dispute Resolution (ADR) in all agreements.

    “All agreements must have a clause for ADR. ADR mechanism must be injected into all agreements, including arbitration, mediation and reconciliation. Under ADR, a dispute mustn’t last more than two or three weeks and it must be made mandatory that before any matter goes to court, it must first go to ADR. Once ADR clauses are embedded in agreements, then it will be faster to deal with. It is only when ADR processes have been explored that disputes can be brought to court. So, it would just be a formality for the court to adopt or reject. If anybody is not in agreement with decisions at ADR, then that person or body can appeal.

    The other way, according to Yusuf, is to ensure that matters are not adjourned indiscriminately. As it is, most courts are overloaded with cases, but then, how much can the government afford for the judiciary? It is limited because you have to juxtapose what the judiciary wants or needs with that of the rest of the country.

    Caution on methods of appointment of judicial officers

    Yusuf suggested that in the process of appointing judicial officers, there was the need to ensure that there were adequate facilities for them to work with. He described the current system as “anachronistic, laborious, debilitating and too tasking.

    “The environment is inclement, not only for the judges, the court officials, the litigants, the lawyers and others. They operate under a harsh environment. They must all be addressed, a situation where the courts are overcrowded, where court lists have about 20, 30 or 40 cases in a day is killing, excruciating and we must deal with these, whether we are going to have the courts expanded or appoint more judges; and they must be given working equipment,” he said.

    Culled: The Nation


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