ADR in Africa

Under your Legal History and Traditions course you have discussed the legal system of the Africans. African indigenous customary norms encouraged ‘Compromise’ over litigations before officers. But these days the status seems to have been changed to some other features. Here is an excerpt from George Washington University, National Law Center 2003, Unfinished business: Conflicts, the African Union and the New Partnership for Africa's Development, by Udombana, Nsongurua J. The text reveals the degree of dispute in the continent, the measures being taken to resolve them and attempts of regional institutes (OAU and now AU) on the matter.

The North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement (NAFTA) is an intergovernmental government that creates a free trade area in North America with the United States, Mexico and Canada. NAFTA's purposes include: eliminating trade barriers, promoting fair competition, increasing investment opportunities, providing protection for intellectual property rights, creating procedures for implementing and enforcing NAFTA, and establishing a forum for further enhancement and expansion of the benefits provided by NAFTA.

ADR in Regional Level

This part is devoted to appreciate in a bit detail about the importance of ADR in regional institutes. Thus, the experience of European Union and North American Nations under NAFTA in the settlement of dispute is taken care of. Lastly, the African approach to ADR is considered though it is only in its infant stage of development. I put it in the last for we got many things that we should learn from the other two.

Europe

Access to justice is at the top of the political agenda in all Member States of the European Union. More and more disputes are being brought to court. As a result, this has brought not only longer waiting periods for disputes to be resolved but has pushed up legal costs to such levels as to often be disproportionate to the value of the dispute.

This is where ADRs come in. Alternative dispute resolution (ADR) methods are extra-judicial procedures used for resolving civil or commercial disputes. These usually involve the collaboration of disputing parties in finding a solution to their dispute with the help of a neutral third-party. As there are numerous types of ADR methods available, they can be applied and adapted to a variety of areas whether civil or commercial in nature.

The advent of the single European market has increased the movement of goods and of people across the European Union. Unfortunately, it also has increased the number of disputes involving nationals of different Member States. These cross-border disputes add another dimension of complexity to already complicated issues. In this context, ADRs are regarded as an important element in the attempt to provide fair and efficient dispute-resolution mechanisms at EU level.

In recent years, the use of ADRs has increased considerably in the European Union. They are being used to resolve disputes between citizens and administrations, within families, working relationships or yet again in commercial relations and consumer disputes.

At the European Council on Justice and Home Affairs that took place in Tampere (Finland) in October 1999, EU leaders drew attention to how much importance they place on the role of ADR in cross-border disputes. In March 2000 at the Lisbon Summit on employment and the information society, EU leaders asked the European Commission and the EU Council of Ministers to reflect upon ways of applying ADR methods to resolve conflicts in the area of e-commerce in view of promoting consumer confidence.

In the field of consumer disputes, ADR has become a special priority of the Commission. As such, it has adopted two recommendations on the subject:

• one on procedures involving a third party who proposes or imposes a solution (30 March 1998);
• another on procedures which are restricted to a single attempt to draw conflicting parties together to help them find a common solution (4 April 2001).

Furthermore, a network of national bodies (ECC-NET) was created to facilitate the task of finding extra-judicial solutions to cross-border consumer disputes. The European Commission has established to ADR related organisations:  The European Extra Judicial Network (“EEJ-Net”) and the Financial Services Complaints Network (“FIN-NET”) for matters relating to financial services. The Commission’s Green Paper says: “All political and legislative endeavours, initiatives and debates to date at national, Community and international level have been aimed at preserving the quality of ADRs in terms of accessibility, effectiveness and guarantees of good justice while maintaining their flexibility.”

The Commission has launched in April 2002 a Green Paper on ADR so as to initiate a constructive debate on a certain number of legal issues, which have been raised as regards alternative dispute resolution in civil and commercial law. The questions in the Green Paper relate to the essence of the various means of alternative dispute resolution such as clauses in contracts, limitation periods, confidentiality, the validity of consent given, the effectiveness of agreements generated by the process, the training of third parties, their accreditation and the rules governing their liability.

The Green Paper talks of certain non-determinative forms of ADR helping to achieve social harmony in that “the parties do not engage in confrontation but rather a process of rapprochement”. Well that is fine in my experience but, in reality, much mediation involves parties who have a considerable enmity towards one another. They may be engaging in the process for a whole variety of reasons - but the desire for non-confrontation and the achievement of rapprochement is often not at the forefront of their minds! They may be engaged in the ADR process because they are adopting a commercial “common sense” approach to the dispute. The dispute may already be subject to litigation with large costs already incurred and perhaps is approaching a lengthy and costly trial. Parties may be there because they have been advised to give the process a chance.

They may be there to elicit information. They may be there to give the impression of being reasonable. Whatever the reason or motivation for parties attending mediations or engaging in other forms of ADR, there is no doubt that it is becoming increasingly popular.

Commission Green Papers are documents intended to stimulate debate and launch a process of consultation at European level on a particular topic (such as social policy, the single currency, and telecommunications). These consultations may then lead to the publication of a White Paper, translating the conclusions of the debate into practical proposals for Community action.

Following this consultation period and based upon the contributions of the debate's participants, the Commission has decided (see the Commission Scoreboard on Justice and Home Affairs COM(2003) 291 final) to launch two initiatives:

• Work will start in 2003 to develop a European plan for best practice in mediation in 2004 a a European code of conduct has been launched.
• In 2004 the Commission is planning to present a proposal for a directive to promote mediation.

On 2 July 2004 a conference was held in Brussels to discuss self-regulatory initiatives for mediation in general and to launch the European code of conduct. The conference was attended by some 100 participants. The morning session saw a number of presentations on national experiences of self-regulation. The afternoon session was introduced by Mr Faull, Director General for DG Justice, Freedom and Security of the European Commission, and was followed by a panel debate on the European code of conduct.

The concept of a European code of conduct as a voluntary instrument to improve quality and trust in mediation was supported. It was generally considered that the code should remain an informal document at this stage and that it should not be adopted formally by any of the institutions of the European Union. It will be the responsibility of those individual mediators and organizations that wish to subscribe to the code to also take ownership of the code, including defining implementation mechanisms.

It was agreed that as a next step the code will be made available on the internet together with general information on the code and a first list of mediation organizations who have declared that they subscribe to the code.

As further follow-up the Commission services will consider organising ad hoc meetings with representatives of organisations subscribing to the code to review implementation and content as necessary.

Further large-scale meetings may also be organised on a yearly basis, open for all interested parties, to discuss specific issues of ADR in order to maintain dialogue and encourage exchange of experiences. The next meeting of that type could be held in 2005.

As to access to justice – this is a fundamental right as provided for by Article 6 of the European Convention on Human Rights and Fundamental Freedoms and the right to valid remedies has been decided as being a general principle of community law (Case 222/84 Johnston [1986] ECR 1651) and this is entrenched in Article 47 of the Charter of Fundamental Rights of the European Union.

Unfortunately with litigation and arbitration, access to justice is sometimes restricted due to the inability of a party to pay the costs involved and by reason of the restrictions of legal aid (not available at all in arbitration and frequently not granted or not adequate in civil litigation in the UK). So it has long been said with a certain irony that “Justice like the Ritz Hotel is open to all!” Perhaps ADR is an effective means of addressing that sorry state of affairs.

It is evident that the European Union is taking positive initiatives to facilitate access to justice through ADR. These initiatives are highlighted in the Green Paper on alternative dispute resolution in civil and commercial law presented by the Commission of the European Communities on 19^th February 2002. That paper states that ADR is an “integral part of the policies aimed at improving access to justice”.

In some Countries there is State funding for forms of ADR – for instance in France the justice conciliators are not paid by the parties and in Ireland the family mediation service’s operating costs are funded by the Government. In Sweden the office for damage attributable to road traffic has its operating costs covered by motor insurance companies and in the UK the costs of mediation may properly be claimed against the Legal Services Commission on the part of a legally aid party.

In seeking to harmonise legislation in Member States the Council of the EU in a draft directive (COM (2001) 13 final) has said “Legal aid shall be granted in cases where disputes are settled via extra-judicial procedures, if the law makes provision for such procedures or if the parties are ordered by the court to have recourse to them.” (Art 16).

ADR and its increasing deployment is a political priority within the European Union, particularly in relation to the resolution of disputes involving electronic commerce (note for instance the March 2000 Lisbon European Council).

Different member states not surprisingly approach ADR differently. Finland makes conciliation a pre-requisite to court action. In Germany judges are asked to support an amicable resolution through court proceedings. In France Article 21 of the Civil Code states that it is the duty of judges to reconcile the parties. In England the Civil Procedure Rules expressly encourage the use of ADR. Various member states have been testing different ADR procedures.

It suggests that it may be sensible to promote legislation extending the limitation periods to account for the period of mediation. The downside is that sometimes ADR fails to achieve a resolution and occasionally (though it is felt rarely) they fail because one party has not been acting in good faith in the process and may simply have been “buying time”. That represents a not insignificant risk and it might be considered that the automatic extension of limitation periods would be unfair in such circumstances. Furthermore the existence of time pressure is sometimes a positive benefit in ensuring that the ADR process reacts flexibly and speedily to the situation at hand and the very existence of time may occasionally be a real disincentive to settlement being achieved.

Confidentiality is a key to the success of ADR procedures whereas the trend with litigation is for openness (including public hearings). In a commercial context confidentiality as such has its benefits and its downsides. . It allows parties to settle matters outside the glare of publicity which may have adverse consequences on their reputations, goodwill, and even share prices. In fact mediation may take advantage of the leverage of publicity in litigation in the sense that parties will know that if the ADR processes fails, it may mean that everything in the dispute will come out into the open – that itself may be an incentive for the parties to make sure that the ADR process succeeds. On the other hand the existence of confidentiality sometimes encourages parties to take realistic positions, which they perhaps would be less willing to expose in a public area.

The bottom line is that ADR is succeeding in the UK and deserves to succeed across Europe but the word needs to be spread. Plainly there is a very favourable climate for ADR and mediation in particular within the European Union. Member States are taking their own initiatives. The commercial community once it has a sufficient experience of the ADR processes will naturally warm to them and at least see ADR as a sensible option for use before an costly “battle” takes place in litigation or arbitration (or at suitable times during the course of litigation or arbitration but before judgment is delivered). In England there is even a mediation scheme in respect of cases going to the Court of Appeal which have already been determined in the High Court or County Court. A body such as “Euro Expert” is especially well placed to promote the judicious and sensible use of ADR in its members’ home territories and also in cross-border disputes - and I for one encourage such an approach by Euro Expert and the members of its constituent member organizations.

A. Background and Working of ICC

The International Chamber of Commerce (ICC) was founded in 1919 to serve world business by promoting trade and investment, open markets for goods and services, and the free flow of capital. The organization's international secretariat was established in Paris and the ICC's International Court of Arbitration (ICA) was created in 1923.

The International Chamber of Commerce (ICC) is a non-profit, private international organization that works to promote and support global trade and globalization. It serves as an advocate of some world businesses in the global economy, in the interests of economic growth, job creation, and prosperity. As a global business organization, made up of member states, it helps the development of global outlooks on business matters. ICC has direct access to national governments worldwide through its national committees among others.

To attain this objective, ICC has developed a range of activities. The ICC International Court of Arbitration (ICA) is a body which hears and resolves private disputes between parties. Its voluntary rule-writing for business spreads best practice in areas as varied as banking, marketing, anti-corruption and environmental management. Their policy-making and advocacy work keeps national governments, the United Nations system and other global bodies apprised of the views of the world business on some of the most pressing issues of the day.

ICC's first president was Etienne Clémentel. In December 2004 the World Council elected Yong Sung Park as the Chairman of ICC, Marcus Wallenberg as the Vice-Chairman and Jean-Rene Fourtou as the Honorary Chairman. In June 2005, Guy Sebban was elected International Secretariat by the World Council.

Initially representing the private sectors of Belgium, Britain, France, Italy and the United States, it expanded to represent worldwide business organizations in around 140 countries.

World Council, National Committees, and International Secretariat - The ICC World Council is a general assembly of a major intergovernmental organization composed of business executives. National committees name delegates to the Council. Ten direct members may be invited to participate. It usually meets twice a year. The Council elects the Chairman and Vice-Chairman for two-year terms. The Council elects the Executive Board on the Chairman's recommendation.

The Secretary General heads the International Secretariat. The Secretary General works with the national committees to carry out ICC's work programs and is appointed by the World Council. The ICC International Secretariat, is based in Paris and is the operational arm of ICC. It carries out the work programme approved by the World Council, feeding business views into intergovernmental organizations.

The Executive Board is responsible for implementing ICC policy. The Executive Board has between 15 and 30 members of both business leaders and ex-officio members. They serve for three years. They have a one third rotation in membership. The Chairman, his immediate predecessor, and the Vice-Chairman form the Chairmanship.

National Committees represent the ICC in their respective countries. They recommend to the ICC their respective national business concerns in its policy recommendations to governments and international organizations. There are established formal ICC structures in over 90 countries. In countries where there is no national committee, companies and organizations such as chambers of commerce and professional associations can become direct members. ICC has access to national governments through its network of national committees.

Finance Committee, advices the Executive Board on all financial matters. It reviews the financial implications of ICC's activities and supervises the flow of revenues and expenses of the organization. The Chairman is elected by the ICC World Council.

Commissions develop international and national government initiatives in their subject areas. They also develop business positions for submission to international organizations and governments. Commissions are composed of more than 500 business experts from member companies.

B. Dispute Resolution Services

ICC International Court of Arbitration (ICA) continues to provide the most trusted system of commercial arbitration in the world, having received 14000 cases since its inception in 1923. Over the past decade, the Court's workload has considerably expanded.

The Court's membership has also grown and now covers 86 countries. With representatives in North America, Latin and Central America, Africa and the Middle East and Asia, the ICC Court has significantly increased its training activities on all continents and in all major languages used in international trade.

In the world of international commerce, the ICC is perhaps best known for its role in promoting and administering international arbitration as a means to resolve disputes arising under international contracts. It is one of the world's leading institutions in providing international dispute resolution services, together with the American Arbitration Association, the London Court of International Arbitration (LCIA), the Singapore International Arbitration Centre (SIAC), and the Stockholm Chamber of Commerce.

It is common for international commercial contracts to provide for an agreed means of resolving any disputes that may arise, and the ICC is one of leading institutions for administering international arbitration. The ICC's dispute resolution services also include ADR procedures such as mediation and expert determinations.

With the launch of ICC's BASCAP (Business Action to Stop Counterfeiting and Piracy) initiative, more than 130 companies and trade associations are now actively engaged in a set of projects designed to defeat the pirates and increase public and political awareness of the economic and social harm caused by this illegal activity. BASCAP is using ICC's global media network and national committee structure to spread the word.

BASCAP was launched in 2004 by the then ICC Chairman, Jean-Rene Fourtou, and its an operational platform established by ICC that connects all business sectors and cuts across all national borders, drawing them together to ensure that their message is clearly heard by governments and the public. BASCAP is prepared for a sustained effort to end this scourge. As the only business organization with a truky global reach, ICC is well placed to take the fight against counterfeiting to the level required for action to be effective.

D. ICC Rules

Since its establishment the ICC has adopted different rules to foster the settlement of disputes by using ADR. The rule that establishes the International Court of Arbitration, i.e. ICC Rule of Arbitration is the most recent one. In addition, it has adopted the ICC Rules of Optional Conciliation which came in to force in January, 1988. The later rule is now substantially being replaced by ICC ADR Rules. The widely used definition of ADR is not fully accepted by the ICC. For instance, ADR has been defined by as “Amicable Dispute Resolution” as contrary to the widely used meaning ‘Alternative Dispute Resolution’. In addition, in most of the official ICC documents and its rules, ADR does not include arbitration but only proceedings which do not result in a decision or award of the Neutral which can be enforced at law.

The ICC ADR Rules are the result of discussions between dispute resolution experts and representatives of the business community from 75 countries. Their purpose is to offer business partners a means of resolving disputes amicably, in the way best suited to their needs. A distinctive feature of the Rules is the freedom the parties are given to choose the technique they consider most conducive to settlement. Failing agreement on the method to be adopted, the fallback shall be mediation.

As an amicable method of dispute resolution, ICC ADR should be distinguished from ICC arbitration. They are two alternative means of resolving disputes, although in certain circumstances they may be complementary. For instance, it is possible for parties to provide for ICC arbitration in the event of failure to reach an amicable settlement. Similarly, parties engaged in an arbitration may turn to ICC ADR if their dispute seems to warrant a different, more consensual approach. The two services remain distinct, however, each administered by a separate secretariat based at ICC headquarters in Paris. The ICC ADR Rules, which replace the 1988 ICC Rules of Optional Conciliation, may be used in domestic as well as international contexts.

Let’s have a much closer look at the ICC Arbitration Rule adopted in the year 1998. The arbitration rule composed of different parts that supplement the body of the rule. It has 35 articles, which makes the main body of the rule, followed by three Appendixes.

The rule starts with a standard arbitration clause and standard clause for an ICC pre-arbitration reference procedure and ICC arbitration. As to my own view, it is desired to attain uniformity and common understanding between the disputants as to the valid effect of the proceeding and give full power either to the ICC rule and/or the tribunal as the case may be. Here are these standard clauses, the first being the arbitral clause and the second is the clause for an ICC pre-arbitration reference procedure and ICC arbitration. (www.iccarbitration.org).

“All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.”

“Any party to this contract shall have the right to have recourse to and shall be bound by the pre-arbitral referee procedure of the International Chamber of Commerce in accordance with its Rules for a Pre-Arbitral Referee Procedure.

All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules of Arbitration.”

The main body of the rule has 35 Articles under seven different headings. The first part is ‘Introductory Provisions’ composed of the declaration of the existence of the International Court of Arbitration (ICA) and definition of terms. The second part deals with the ‘the Commencement of the Arbitration’ like the effect of the arbitration agreement and the like. The next one is about the “Arbitral Tribunal” followed by the part which defines the ‘Arbitral Proceeding’. In these parts the number, appointment and replacement of arbitrators, and the place, rules, languages and closing of the tribunal has been well defined. The fifth part discusses about the ‘Award’ which, for instance, limits the maximum period when the ward should be given to be six months from the commencement of the tribunal. The last two parts speaks about the ‘Cost’ and ‘Miscellaneous’ matters, where the cost part is supplemented by Appendix III.

The three appendixes supplement the main body of the rule and they are equally persuasive. Appendix I is the ‘Statutes of International Court of Arbitration’ which stipulates the function of the court, its members and their appointment and their roles. Appendix II is entitled as ‘Internal Rule of the ICA’. This part exclusively regulates the confidential nature of courts work, the relationship of the members of the court (the Chairman, Vice-Chairmen, and members and alternate members - collectively designated as members) with panellists (arbitrators) and with the ICC National Committee. For instance, the members of the ICA may not act as arbitrators or as counsel in cases submitted to ICC arbitration. The last one, Appendix III, deals with ‘Arbitration Costs and Fees’ supported by two schedules, i.e. administrative expenses and arbitrator’s fee. The amounts of payment are determined according to the pecuniary interest involved over the matter in a regressive rate. The least payment is $2,500 for the administrative expense and the same mount as arbitrators’ fee for a dispute involving an amount not exceeding $50,000, and the maximum is $88,800 for the administrative expense and 0.01% to 0.056% as arbitrators’ fees for a dispute involving more than $100, 000, 000 pecuniary interests.

ICC has over eight decades of experience in devising rules to govern and facilitate the conduct of international business. These include those designed to resolve the conflicts that inevitably arise in trading relations. The ICC being intergovernmental institute is one of the popular institutes in the field of settling trade disputes. Among the means it uses in the settlement of disputes, ADR is one. It has also arbitration tribunal, International Court of Arbitration- ICA, established by the ICC arbitration Rule. Though, it is hardly possible to compare it, the Addis Chamber of Commerce (AACC) Arbitration Rule resembles the ICC arbitration Rule is some respects, like the existence of the cost and expense schedules. A question can be raised as to the cost effectiveness of ADR by observing the schedule of ICC and AACC arbitration rules.