Adjudication v Arbitration – Two Worlds Apart?

 

 

ABSTRACT

I was thrilled to welcome Mr Kelly Agbonze, a Legal Practitioner who was called to the Nigerian Bar more than twelve (12) years ago. He has handled many cases in Arbitration and Litigation. In this EVA episode, we threw more light on the following questions – a) What is dispute resolution? b) Why, Adjudication? c) What are the differences between Adjudication and Arbitration? This last question stems from the arguments in some reviewed literature where some scholars have highlighted the resemblance and differences between them.

                                                               

INTRODUCTION:

 

Why, Adjudication?

 

The Umbrella that holds Dispute Resolution-Litigation

Before defining what Dispute Resolution means, we first looked at what Adjudication is. We pointed out that Adjudication generally refers to the process of decision making, involving neutral third parties who have been vested with authorities either by the state or by the parties under an agreement in an arbitration to determine a binding or deliver a binding resolution through the form of Judgement or award. In other words, there is the court-based or out of court based Adjudication.

We elucidated that Court-based Adjudication is known as Litigation or Dispute Resolution, an involuntary adversarial process wherein the state vests the court with powers to make binding win or lose outcomes. It encompasses court processes to resolve the dispute according to the court’s rules. On the other hand, Arbitration is a private method of Dispute Resolution or in other words, Alternative Dispute Resolution by which the parties under an agreement appoints either a sole arbitrator or a multi-arbitrators arrangement. Under this arrangement, there are many advantages.

 

 The  Similarities between Adjudication and Arbitration: 

We pointed out that there are similarities and differences between them, but we first outlined what joins them together before examining what separates them. Thus, some of these similarities are as follows:

 

a) Decisions Delivered:

The ultimate aim of the two procedures is to have a decision delivered at the end of the day by the judge or the arbitrator- providing a final decision to parties and resolving the dispute between them. With the sole aim of having a decision given at the end of the day. It could either be called a Judgement or an award. 

b) The Involvement of a Third Neutral Party:

The second similarity is the involvement of a neutral third party- the parties appoint the arbitrator for Arbitration under an enforceable agreement. The arbitrator has full control over the arbitration proceedings’ content. Conversely, the judge is appointed by the state and vested with coercive powers to make far-reaching decisions. It is pertinent to point out that they are other dispute resolution- Alternative Dispute Resolution (ADR), which mainly comprises Mediation, Conciliation and Negotiation. These enlisted processes involve a neutral third party that mediates or seeks to deliver a decision except for Negotiation; parties can choose to have no neutral third party.  

c) Outcome Approach: Win-Lose:

The third one is the outcome approach under this; both procedures are usually a win or lose outcome. We went further to explain what these mean- that parties do not go to Arbitration or litigation, and the arbitrator or judge will hand a win-win to them. Unlike in Conciliation, Mediation and Negotiation, there is win-win for parties involved. The enlisted similarities are what ties these two procedures together. 

It is important to note that there are a couple of other similarities; though few. However, they are tied around the similarities mentioned above; thus, this discourse has focused on the three most significant similarities between them. 

 

The Differences between Adjudication and Arbitration

a) Confidentiality:

In Arbitration, the fact that the processes, content and outcome of an arbitral procedure are confidential and kept private; that is why many business people favour Arbitration against litigation. However, this is never the case in litigation-  the procedure and the court’s judgment are all in the public view.  

b) Involvement of Parties:

In Arbitration, parties have full control of selecting their arbitrators, the venue, and the procedural rules, amongst others, but this is against what we have in the regular court. The court determines the rules and the parties have no say in it.  

 

C) Fewer Formalities: 

 Arbitration is less formal as against the rigid procedures in litigation. For instance, in litigation, the rule says that a party can only plead the material facts, not the evidence. However, under Arbitration –section 256 of the Evidence Act expressly prohibits applying the evidence act for arbitral procedures, which means that the arbitrator has the flexible know how to determine the evidence that should be accepted.

For example, in litigation, the court says that this public document was not certified and because it was not certified, the lawyer cannot tender it. However, in Arbitration, the arbitrator is interested in the document’s relevance, and if it is relevant, the arbitrator will accept it. 

d) The Structure :

We highlighted that the court is permanent-its always there- always open for parties. However, the arbitral tribunal comes and goes. In other words, it is based on the parties appointment under an enforceable agreement, so it goes into oblivion/ sleep after determining a particular matter. On the other hand, a judge, of course, derives its coercive powers from the state and delivers far-reaching decisions. For the arbitrator, he does not have the state’s coercive power. 

CONCLUSION

This essay critically examined the similarities and differences between the two procedures. Furthermore, it revealed what potential users of both procedures should consider if their matter can be arbitrated or litigated. 

To hear the full version of this episode, click here.

 

REFERENCES:

Blake, Susan, Browne, Julie, Sime, Stuart, A Practical Approach to Alternative Dispute Resolution (2nd Ed, Oxford University Press 2012)

Evidence Act of Nigeria, 2011

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2 thoughts on “Adjudication v Arbitration – Two Worlds Apart?

  1. The more I read your work, the more simplified and interesting the subject matter of ADR becomes.
    I strongly recommend your approach.
    Knowing about the differences and similarities of this two procedures – Adjudication and Arbitration:; will enable one make an informed decision when necessary. I really appreciate the knowledge I acquired here.
    Weldone Chinwe! Stay focused like this!

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