‘Lawyers often influence clients’ views about arbitration’

Arbitration as an alternative dispute resolution mechanism is gradually gaining currency in Nigeria, especially among younger people. Nathan Searle, a Partner at Hogan Lovell’s firm, United Kingdom (UK) in this interview with Joseph Onyekwere explains why this is so and other topical issues.

You are the consultant to the Association of Young Arbitrators in Nigeria. Tell us more about the group and some of its success stories?
The Association of Young Arbitrators (AYA) in Nigeria is exciting because it is an organisation formed by young practitioners for young practitioners. AYA has brought together a world-class board of advisors to assist them to develop the organisation. AYA has exciting plans to develop a mentoring programme as well as conference for members to learn from each other and exchange ideas.

In your experience as an arbitrator, what are some of the factors that could easily frustrate PPP agreement in the area of infrastructure building and how can the Nigerian Government avoid such factors in the event that we have willing investors?
In addition to regulatory certainty, PPP projects need to be structured so that they are “bankable” in order to attract private sector finance. This includes having an identified revenue stream, a means for appropriately mitigating sovereign/political risk (such as by way of Government guarantees, political risk insurance or participation by the World Bank or other Development Finance Institutions) and a stable and effective foreign exchange regime.

The United Kingdom is reputed as one of the most arbitration-friendly countries around the world and this has, no doubt, had direct positive impact on the country’s economy. What can Nigeria learn from the UK in this area?
There are a number of factors that make London an arbitration friendly jurisdiction. They include, a modern arbitration law, courts which are efficient, well resourced and supportive of arbitration, top-class lawyers and experts, well-run arbitral institutions with an established track record. London also has good transport links and facilities such as hotels and hearing venues. Nigeria shares many of these benefits such as its top-class lawyers, transport links and hearing facilities such as the Lagos Court of Arbitration. In England, one area, which has been particularly successful, is the limits placed on appeals of arbitral awards and all arbitration appeals being heard by the specialist commercial court. This leads to a lower volume of arbitration appeals and those appeals, which do go to the English courts, are being determined expeditiously. This may be one area that Nigeria could consider reform as appeals of arbitration awards often suffer from significant delays in the Nigerian courts due to the high caseload and stretched resources of the courts.

In spite of its many obvious benefits, the use of arbitration and other ADR mechanisms in resolving disputes has not gained much popularity among Nigerian litigants as many still want to go to court to settle their disputes. How can we stimulate interest in arbitration in our commercial environment?
Lawyers often influence clients’ views of arbitration and how to resolve their disputes. Accordingly, a major way to stimulate interest in arbitration is to educate and train lawyers and create a forum for lawyers to discuss and engage on how to drive forward arbitration in Nigeria. There are a number of organisations in Nigeria seeking to do this including the Association of Young Arbitrators in Nigeria. Focussing on younger practitioners and showing the benefits of arbitration for resolving commercial disputes for small to medium sized enterprises (particularly as the procedures are flexible and can be adopted to suit the parties and the nature of the dispute) could really drive growth in the use of arbitration.

Have you had an assignment in which you had to take a different approach and was any party affected?
You need to think about that when you’re structuring. Sometimes what you want to have is an umbrella disputer where all the parties can go to a single forum to resolve their disputes. In other cases you may feel that actually, that is not going to be practical because you have too many parties and too many voices. They may need to think about making the contracts back to back and whether if the contractor is liable to the employer on this particular course so if it is the work of the contractor, how indebted he is to his work. You may just decide that actually in this case we want it separate because it is just a small part of the contract. In other cases, in case you are doing a finance party, the principle of the main contractor, you may want in certain circumstances to do that. I remember, when I dealt with where the developing financial institution in the state entity fell out and it was issue for this particular concession where money had to be paid and there was a question about two parties asking the corporation to pay into different places and in that case, they were under separate arbitration agreements and It created a tricky situation. It would have been preferable and a lot easier for everyone if there had been an umbrella arrangement.

It has been said that the best way for the Federal Government of Nigeria to rebuild the insurgency-ravaged Northeast is through Private-Public Partnership. From your perspective as an arbitrator, what steps must the Nigerian Government take to attract the right investors?
Infrastructure projects are long-term projects, so a key criteria for investors is regulatory certainty. Accordingly, it is important that the Government provide certainty about the regulatory environment in which the infrastructure projects will be built and operate.

How do you usually deal with difficulties that arise when starting projects?
Speaking from personal experience, I acted for a client, where after a conflict, they had been granted a concession. They got caught in a crossfire with a third party who had previously held the same concession. The arbitration is flexible when you need to think creatively so I might seek relief as to how the project that I am building might be affected.