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4. Rational Dispute Resolution – Weak
Goal – An efficient institutional framework that balances the rights of the public, owners, lenders and borrowers in the event of a dispute or loan default
Core Question: Do all market participants abide by the rule of law and have confidence in the courts and the ability of police to control crime? No – Very Weak, while there have been some recent improvements, rule of force still predominates in much of the country.
4.1.1 What is the confidence level of the strength and impartiality of the police, courts and contract enforcement? Very Weak – Percentile Ranking – 9.9Trend↓
Source: 2011 Governance Matters, World Bank, www.govindicators.org
4.1.2 Can members of the judiciary be held accountable for their actions? Yes– Score 74 out of 100 – Moderate
Source: 2010 Global Integrity Report – https://www.globalintegrity.org/global/the-global-integrity-report-2008/nigeria/
Costs of Crime
4.1.3 What are the business costs of crime and violence? High costs – Ranking 128th out of 144 – Score 3.3 out of 7, Very Weak
Source: The Global Competitiveness Report 2012-2013, World Economic Forum
Core Question: Are systems in place for timely and efficient enforcement of contracts?
Commercial – No – Weak
Residential – Yes – Strong
4.2.1 – Judicial Enforcement
Commercial – Weak – Ranking 98th out of 185 Trend ↓
188.8.131.52 What is the number of procedures involved in resolving a commercial dispute? 40
184.108.40.206 What is the time between the filing of a lawsuit and resolution in judicial enforcements? 457 days
220.127.116.11 What is the cost of judicial enforcements as a percentage of claim value? 32%
Source: Doing Business 2013 http://www.doingbusiness.org/data/exploreeconomies/nigeria#enforcing-contracts
SQ 10 What is the time between notice of intent to foreclose and loan collection in judicial enforcements? See below for power-of-sale
SQ 11 What is the cost of judicial enforcements as a percentage of property value? See below for power-of-sale
4.2.2 – Summary Proceedings
SQ 12 Summary proceedings are alternative dispute resolution processes where creditors can apply for a direct court order in property disputes. What is the time between notice of intent to foreclose and loan collection in summary proceedings if available to lenders? See below for power-of-sale
SQ 13 What is the cost of summary proceeding if available to lenders as a percentage of property value? See below for power-of-sale
4.2.3 – Power-of-Sale
SQ 14 What is the time between notice of intent to sell and loan collection for power-of-sale agreements if available to lenders? 112 days – Very Strong
SQ 15 What is the cost of power-of-sale agreements if available to lenders as a percentage of property value? 6.19% – Strong
Source – Financing Homes 2008, World Bank and International Housing Finance Corporation http://www.cipe.org/sites/default/files/publication-docs/Financing%20Homes%202008.pdf
Core Question: Can commercial disputes be resolved efficiently and fairly without exorbitant expense and delay? Yes – Strong, there is growing consensus that foreign investment is essential to realizing Nigeria’s vast potential.
4.3.1 Commercial Courts
SQ 16 Do specialized commercial courts exist for the handling of property disputes and foreclosures? Yes – Weak, Commercial Division of the High Court of Lagos began in 2002; reforms are underway in court procedures and handling of cases.
Source: High Court of the State of Lagos www.nigeria-law.org/High%20Courts.htm
4.3.2 Alternative Dispute Resolution
SQ 17 Are alternative dispute resolution mechanisms in place including commercial arbitration, private mediation and community based processes? Yes – Strong – a member of the New York Convention, National ADR Law passed in 2007, Lagos law passed in 2009 and there is growing support
Source: The Lagos Multidoor Courthouse, http://www.lagosmultidoor.org/component/content/article/37-frontpageslide/64-adrinnigeria
4.3.3 Commercial Treaties
SQ 18 What bilateral, regional and international commercial treaties exist concerning business between countries? Strong – a member of WTO, OPEC, the Economic Community of West African States (ECOWAS) with a Trade Investment Framework with the U.S. and the U.K., Bilateral Economic Cooperation with China
Source: U.S. State Department Background Notes: www.state.gov/r/pa/ei/bgn/2836.htm
Federal Republic of Nigeria: http://www.nigeria.gov.ng/2012-10-29-11-05-46/foreign-relations
FQ 8. To what extent do practitioners report the use of formal contracts and trust institutions to support contract enforcement?
Two major factors account for the state of affairs in Commercial Dispute Resolution in Nigeria today namely:
1. Obsolete laws (particularly with regard to the rules of procedure) and
2. Judicial attitude (particularly with the lack of specialization of judicial personnel).
The civil resolution of Commercial Disputes is one of the many functions of the High Courts in the various states of Nigeria. The Lagos High Court for instance is constituted to deal with all manner of cases ranging from the trade Union/Labor Relations matters to commercial, environmental, Professional Practice and Arbitration awards etc. It is commendable that a commercial division of the court has been established to deal exclusively with resolution of commercial disputes. It has long been realized that in commercial matters time is of the essence as time is money, more so in the context of a fast growing economic environment such as Nigeria’s.
Only a speedy and effective system of resolution of business disputes will ensure that redress is not sought in unlawful extra-judicial means, as sometimes is the case or that business executives do not choose the other option of licking their wounds in the event of botched transactions to the detriment of the common good. The current practice in the Lagos high Courts follows the English practice.
Hand in hand with the clarion call for commercial courts in all judicial divisions in Nigeria, will be the need for specialist Judges in all spheres of commerce, Banking and Credit, Companies and Allied Matters, Patents and Intellectual Property etc. These Judges by their background and training will be adequately equipped to appreciate the needs and aspirations of the business community in their adjudication. The ideal justice delivery system such as that envisaged by the establishment of commercial courts will be that where process and personnel are positioned to take full advantage of the developments in technology by employing the appropriate scientific devices to save judicial time and remove the physical stress placed on Judges in court who at the present time still take notes in long hand, a job that can be more efficiently and conveniently handled by trained stenographers.
In summary, public interest and the interest of all persons in commerce demand the establishment of commercial divisions within our various courts to take the nation into the new information technology era in partnership with other advanced countries of the world who have given priority to the role of Judicial and legal reforms as a necessary element of development within the comprehensive development framework of the more advanced and prosperous nations of the world.
Source: The Courts and Commercial Dispute Resolution in Nigeria: The Need for Specialization, 2005, Babalakin and Co, Commercial Law Firm. www.babalakinandco.com/documents/TOWARDSAQUICKRESOLUTION.pdf