By Omoh Gabriel, Business Editor
The Negotiation and Conflict Management Group, NCMG which has justice Kayode Eso C.O.N, Gamaliel Onosode, Dr. Christopher Kolade, Shehu Musa among others as board of Governor has sent a proposal to the federal government through the Central Bank of Nigeria CBN on how to resolve legal issues that may truncate the on going consolidation in the banking industry. The proposal if adopted by the monetary authorities will fast forward the consolidation in the banking industry. The proposal was an out come of a seminar the NCMG held with the CBN on ways to forster the CBN induced consolidation in the banking industry. The proposal “The Mergers and Acquisition Dispute Resolution Program (MADREP)” is hinged on three planks
• The MADREP pledge• The MADREP agreement • The MADREP solve
The proposal seeks alternative to dispute resolution other than the court process which may take years to reach a conclusion. It will be recalled that the Securities and Exchange Commission had drawn attention to the fact the up to December last year no bank had given the capital market regulatory authorities of any merger notice. The SEC had warned that the judicial process involved in merger and acquisition is capable of derailing the entire consolidation process.
According to NCMG “For most business disputes, alternative dispute resolution holds the promise to speedy, amicable, cost-effective and private resolution. M & A related disputes are no exception.
Alternative Dispute Resolution, NCMG said refers to any means of settling disputes outside of the “courtroom” but not necessarily outside of the courthouse (The Lagos & Abuja Multi-Door Courthouses are examples of court connected ADR Centres located within the administrative structure of the Court). The NCMG proposal includes negotiation, mediation, arbitration, early neutral evaluation, conciliation and other hybrids”.
Continuing the NCMG said it was motivated to send the proposal going by the burgeoning court queues, rising costs of litigation and time delays which continue to plague litigants, and stall businesses, in Nigeria particularly as more businesses are beginning* to lay the foundations for alternative dispute resolution in their terms of contract by including in them ADR clauses to accommodate disputes that may arise as a result of the contract.
The NCMG proposal suggest that for “an efficient management of M & A related disputes, the cardinal point in designing a successful ADR process is that it must be fair in fact and perception and must be mutually acceptable to the parties. It is in this regard that we have designed/ customized the Mergers & Acquisition Dispute Resolution Program: MADREP”.
The NCMG proposal for Mergers & Acquisition Dispute Resolution Program is categorised into three:
• The MADREP Pledge, • The MADREP Agreement, •The MADREP Solve.
According to the proposal “The MADREP Pledge is a promise of good faith between: merging banks; merging banks and their employees merging banks and their advisers; merging banks and their shareholders; merging banks and their executive management board; merging banks and the various unions.
The aim of the MADREP pledge it said is to foster a commitment between merging parties to confidential and non-adversarial forms of dispute resolution through ADR. Simply put, signatories to the MADREP Pledge undertake to make ADR their first option in the resolution of disputes that may arise with a simple pledge as follows:
* To explore Negotiation, Mediation, or Arbitration twards the resolution of any dispute which may arise as a result of this merger agreement before litigation is considered.
* In the event that litigation is recommended or finally resorted to in the resolution of any given dispute which involves any other party that has signed this pledge, it will be commenced only after a notice has been forwarded to the other party, provided that the commencement of such an action does not preclude further attempts at negotiation or mediation by the parties.
In the case of MADREP Agreement clauses which parties to a MoU or merger agreement may insert to instruct disputes that may arise from their contract.
Dispute resolution clauses may specify only one dispute resolution mechanism or may provide an opportunity for others. The proposal suggest a two or three step process. “It might first stipulate that if the parties are unable to work out their differences on their own through negotiation, mediation may be resorted to and in the event that it is still not resolved through mediation, parties may then submit to binding arbitration”.
* “In the event of any dispute, claim, question, or disagreement arising from or relating to this Memorandum of Understanding (or merger agreement) or the breach thereof, the parties hereto shall use their best efforts to settle the dispute, claim, question, or disagreement. To this effect, they shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable solution satisfactory to both parties.
* Failing the ability of the parties to resolve the dispute within a period of 14 days through negotiation; all disputes, claims questions or differences shall be referred to confidential mediation at The NCMG Centre for Dispute Resolution in accordance with the provisions of its Commercial Mediation Rules. The mediation proceeding may be initiated by either of the parties upon notice to the other party (ies) or the NCMG Centre for Dispute Resolution
* Failing the ability of the parties to resolve the dispute through mediation, the dispute shall be referred to arbitration as administered by The NCMG Centre for Dispute Resolution in accordance with the Arbitration and Conciliation Act, Cap. 19, L.F.N.
There shall be a single arbitrator, and the appointing authority shall be the NCMG Centre for Dispute Resolution. The venue of arbitration will be the NCMG Centre for Dispute Resolution Lagos, or such other venue as agreed by the parties or advised by the NCMG Centre for Dispute Resolution.
The MADREP Design also recommends a hybrid of the fore mentioned processes for the effective resolution of related disputes. Examples of such processes are
This is a process in which an experienced attorney, retired judge or a dispute resolution specialist evaluates the relative strengths and weaknesses of the positions advanced by the parties, the probable outcome at trial and offer parties an impartial assessment of case strength. The evaluator will assist the parties in settlement negotiations and/or renders an advisory opinion as to settlement value, if parties so request.
