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Nigeria – June 2008 / December 2009

Expanding Commercial Alternative Dispute Resolution (ADR) Institutions and Mechanisms in Nigeria

Background

Micro, Small, and Medium Enterprises (MSME) face a number of constraints which inhibit the conduct of business in Africa’s second largest economy. Formal surveys and focus group discussions across the country have consistently identified the lack of efficient dispute resolution through the judicial system as a problem in initially concluding contractual arrangements, and as the cause of serious loss of time, as well as expense and frustration, in pursuing a legitimate claim through the courts.

 

The International Development Association of the World Bank has therefore financed a pilot project which aims to improve the investment climate. The pilot states, Abia, Kaduna and Lagos, are to be supported in developing ADR mechanisms to facilitate the adjudication of commercial disputes involving MSMEs.

Objectives

The objective of ADR Center – International Technical Assistance is to support the States of Abia, Kaduna, and Lagos in establishing and/or expanding ADR institutions and mechanisms to facilitate resolution of disputes involving MSMEs. Thiswill improve the investment climate by strengthening existing systems and establishing new mechanisms, aimed at facilitating justice access and reducing the time and costs involved in the resolution of commercial disputes.
 
The ADR mechanisms to be established and/or expanded may include “court-annexed”, “court-connected”, or “free-standing” programmes, based on an assessment phase at the outset of the project. In addition to reductions in time and costs of commercial dispute resolution, the success of this project will be measured by appreciable increases in the number of users of ADR mechanisms and the percentage of disputes resolved through ADR in the three States.

Methodology

This project targets three highly different States as prospective role models for other States in Africa’s most populous country. In the States of Lagos, Kaduna and Abia, the project seeks to:

  • assess the prospects for several types of ADR, and examine and recommend particular types of cases most appropriate for inclusion or exclusion in ADR schemes, with particular emphasis on micro, small and medium enterprise;
  • evaluate the Lagos Multi-Door Courthouse and Citizens Mediation Center, with the object of determining the degree to which they can be replicated in other states;
  • evaluate and recommend ways and institutions to establish and manage court annexed, court connected and free-standing ADR mechanisms, including ways to fund them;
  • establish qualification and training schemes for arbitrators and mediators;
  • recommend ways of collaborating with existing private-sector providers of ADR training and services;
  • develop complementary public awareness and sensitization programmes aimed at key stakeholder groups;
  • draft appropriate laws and regulations for expansion of ADR schemes;
  • develop operational manuals for ADR mechanisms and institutions;
  • develop capacity for training of key stakeholder groups such as judges and members of the legal profession, working with academic institutions and other curriculum providers; and
  • recommend methods and indicators for monitoring the effectiveness of results achieved.

In the complex design of this project, a number of specific design elements are deferred until the completion of the needs assessment phase.

Key Activities:

  • Research Study. Assess the ADR environment already present in Nigeria, and determine the most appropriate dispute resolution type(s) for each State.
  • Public Awareness Activities. Prepare Operational Manuals for procedural guidelines and ADR management systems, and create draft laws and amendments. Conduct targeted sensitization. programmes to increase professional and public awareness of ADR.
  • Training for Lawyers. Design training programmes, materials, and curricula for ADR mechanisms, deliver the initial series of such trainings, including a train-the-trainers element, and provide on-going technical assistances to implement effective ADR institutions.
  • Programme Evaluation. Create standards to evaluate programme success and ways to promote long term sustainability and efficiency.

 

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