Keywords

1 Introduction

Alternative Disputes Resolutions (ADR) involves a wide range of dispute resolution process that parties explore in settling their dispute without necessarily resorting to court. In this regard, the disputants to a dispute whether individual or corporate are often referred to as parties mainly at the options of arbitration, mediation, early neutral evaluation, negotiation, and conciliation without necessarily being litigants. A settlement is the finale of every dispute, whether for, against or on a win-win basis and can be done at the beginning, during or the end of a litigation, just as it can also be reached at the beginning, ongoing or conclusion of any of the options resorted to, in ADR. Hence, a settlement is encouraged at every phase of dispute.Footnote 1

Once a settlement is reached in arbitration, mediation, or conciliation proceedings, it becomes paramount to ensure the execution and enforcement of the agreed terms. This ensures that the settlement brings about the desired outcomes and maintains the faith of the parties involved in the alternative dispute resolution (ADR) processes. However, the validity of the executed terms of settlement can present unique challenges in these quasi-judicial mechanisms, which often operate under different rules and procedures.

In arbitration, the validity of the executed terms of settlement revolves around the Arbitrators/Tribunal.Footnote 2 Mediation, on the other hand, involves the assistance of a neutral third-party who guide the parties towards a mutually acceptable settlement, rather than imposing a decision. Conciliation shares similarities with mediation, as it involves the intervention of a neutral third party who assists the parties in reaching a settlement. Like mediation, the validity of a conciliated settlement agreement depends on the jurisdiction and the parties' agreement.

This essay clears the doubts of executing the terms of settlement in arbitration, mediation, and conciliation. It delves into validating the outcome of these ADR processes in achieving effective execution of settlement. This will allow understanding the nuances of executing settlement terms in ADR and the position of some selected rules of court.

2 Terms of Settlement Under Arbitration

In Arbitration, settlement is not usually regarded as consensual but a decision of the tribunal. This is because the Arbitral Tribunal has undergone different phases and procedures before arriving at a decision or award. However, where the parties decide to settle the dispute, the Arbitral Tribunal shall either issue an order for termination of the arbitral proceedings or, if requested by the parties and accepted by the tribunal, It will record the settlement in the form of an Arbitral award on agreed terms signed by the Arbitrators and communicated by the Arbitral Tribunal to the parties.Footnote 3 In KLRCA Arbitration rules 2013, it encouraged the settlement of dispute before the final award is delivered, and the Tribunal will record it in the form of Arbitral Award on agreed terms, signed by the Arbitrators and communicated by the Arbitral Tribunal to the partiesFootnote 4 which is similar to the UNCITRAL Arbitration rules. This is also the position under the ICC Arbitration rules, provided the settlement is requested by the parties and agreed by the Tribunal, the settlement shall be recorded in the form of an award made by consent of the parties.Footnote 5

On the award under KLRCA Fast Track Arbitration rules 2013, art. 12 paragraph 3 was not specific as to the nature of the award but instead states that, the award shall state the reason upon which it is based.Footnote 6 Owing to this, it will not be out of perspective to include the settlement options or consent award which may take a form of Arbitral Award in the context of art. 12 paragraph 3, and must be signed by the Arbitral Tribunal.Footnote 7 Similar to KLRCA Fast Track Arbitration rules, is the AIAC Fast Track Arbitration Rules 2018, which also left the authenticity of the consent award with the signatories of the Arbitral Tribunal.Footnote 8 The AAA Commercial Arbitration rules 2013 mandates the Arbitrators to set forth the terms of settlement as a consent award and shall be signed by a majority of Arbitrators.Footnote 9 In addition, the CIArb Arbitration rules 2015 also aligned with the previous rules mentioned in that, the terms of settlement should be recorded in form of Arbitral Award and must be signed by the Arbitrators.Footnote 10 The rules are unanimous on this provision on this.Footnote 11

From the forgoing rules, it is evident that settlement can be reached before the conclusion of arbitral proceedings which is validated by the signature of the Arbitrators/tribunal and not that of the parties. Where parties have reached or drawn a settlement but was not properly signed or failed to be signed by the Tribunal. As settlement reached and endorsed by the Tribunal is often considered to be an award. The London Court of International Arbitration rules 2020, provides that in circumstances where arbitrator fails to sign an awardFootnote 12, the majority signatures suffice or where there is no majority, the signature of the presiding arbitrator shall be sufficient.Footnote 13 In any case, for any form of award to be valid. It must be signed by the Arbitrators/Tribunal.

3 Terms of Settlement Under Mediation

The parties retain ultimate control over the decision to settle and the terms of resolution.Footnote 14 Under the guidance of the neutral third party (the Mediator), parties collaboratively work out the solution.Footnote 15 The Mediator is not a legal representative of any party and holds no fiduciary duty to any party.Footnote 16 He lacks the authority to impose a settlement but serve as an assessor to help the parties reach a satisfactory resolution of their dispute. Unlike in arbitration where the Arbitrator/Tribunal signs the award, the Mediator has no such authority. It should be noted that settlement can be reached before, during or after mediation. Under Asian International Arbitration Centre (AIAC) Mediation Rules 2018, when parties settled their dispute through mediation, the settlement reached shall be referred to Arbitral Tribunal to be recorded as a consent award and the mediation shall be deemed terminated.Footnote 17 Rule 13 states that upon the conclusion of the mediation and agreement reached by the parties, parties shall enter into a settlement agreement which shall be written and signed by them and authenticated by the Mediator which shall be final.Footnote 18 But where there is a proceeding in court, the settlement agreement may be recorded before the court as a consent judgement or judgement of the court.Footnote 19

Under the CEDR Model Mediation agreement and procedure 2018. The Parties representatives have the authority to bind the disputants by signing the terms of any settlement when it provided in rule 7 that;

“the term of settlement in Mediation will not be legally binding until set out in writing and signed by or on behalf of each of the parties”.Footnote 20

From the foregoing, the CEDR Model Mediation is flexible as it allows either parties or their representatives to validate the term of settlement. However, in CIArb Mediation Rules 2018, parties are required to personally sign the written settlement agreementFootnote 21 and not their representatives. Similarly, DIFC-LCIA Mediation Rules 2018 goes to the effect that, parties are required to sign the settlement agreement.Footnote 22

Mediation has witnessed a tremendous breakthrough with the coming of Singapore Convention 2020Footnote 23 which marks a milestone for International Commercial Mediation. It establishes a uniform regime for recognition and enforcement of International Mediated Settlement Agreements (IMSAs).Footnote 24 This paved way for a harmonized and uniform structure for the enforcement of mediated settlements which has over time posed to be an impediment to better exploration of mediation. The convention in Article 4 states.

“ A party relying on a settlement agreement under this convention shall supply to the competent authority of the parties where the relief is sought which include the requirement that parties must sign the agreement as well as provide evidence that the agreement resulted from a mediation, the evidence required here can be the mediator’s signature and any document signed by the mediator indicating that mediation took place e.t.c”.Footnote 25

Settlement agreement under the Convention is enforceable by the parties like that of Arbitral Award or judgement in accordance with its rules of procedure and under the conditions laid down in this Convention.Footnote 26 if a party does not comply with the terms under the settlement agreement, the other party can enforce the settlement agreement directly,Footnote 27 provided the competent authority of the state has accented to the convention or is a party to the convention. Unlike before the convention was in force, the parties would have to enforce the settlement agreement like a contract or according to the law of the jurisdiction where they seek enforcement.Footnote 28

4 Terms of Settlement Under Conciliation

Like Mediation, the Conciliator is to be independent and impartial in his attempt to reach an amicable settlement.Footnote 29 Conciliated settlement is submitted to the parties after the conciliator or conciliation body have heard the parties and have graded the case.Footnote 30 The Conciliator shall draw up and sign the record of settlement if the parties agree to the terms submitted.Footnote 31 Hence, indicating that the Conciliator can sign the settlement agreement. However, art. 15 paragraph (a) of the third schedule of Nigerian Arbitration and Conciliation Act provides that the parties to the settlement agreement are to sign the agreement not the conciliator. In the same act, art. 13(1) provides that, the conciliator can formulate possible settlement and submits them to the parties for their observation, and the conciliator may reformulate the settlement terms based on such observations. Art. 13(2) and (3) further shows that the conciliator if requested by the parties can draw up the settlement agreement where parties can sign and put an end to the dispute. Interestingly, s.42(2) of the act states that once parties agree, the Conciliator shall draw and sign the terms of agreement. This prompted a question on whether the parties are to sign the settlement to be endorsed by the conciliation body or by merely agreeing to the settlement allows the Conciliator to execute the record of the settlement. In any case, the conciliator endorses the executed settlement agreement as proof that they have gone through conciliation. This endorsement signifies the termination of the conciliation once the parties sign the settlement agreement.Footnote 32

Similar to the art. 15 of the third schedules of Conciliation Rules in Nigerian Arbitration and Conciliation Act is section 58 of Ugandan Arbitration and Conciliation Act, which provide that the Conciliator may draw up or assist the parties to draw up the term of settlement which must be signed by the parties. It should be noted that s. 73 of the same act is very unequivocal in its provision in that it was specific with the expression, “if requested by the parties, the Conciliator may draw up the settlement agreement to be signed by the parties”. This connotes that the conciliator cannot on his own accord draft the term of settlement to be signed by the parties.

5 Settlement under Rules of the Court

Under the High Court Rules of FCT, Nigeria. The Court is mandated by the application of the parties to enrol the terms of settlement reached at the AMDCFootnote 33 as consent judgement, and the terms shall thereupon have the same effect as judgement.Footnote 34 It further states that, for a consent judgement to be entered, parties must consent either by themselves or through their legal representatives or agent. It should also be noted that where a party has no legal representative. He/she must give consent in person in open court.Footnote 35 This rule placed a weight on either the legal representation or on the party to validate the terms of settlement which later metamorphosed as consent judgement by the Court. However, the Civil Procedure Rules (CPR) in the United Kingdom established a framework in which parties can expedite the resolution of dispute on agreed terms which must be expressed by consent.Footnote 36 The CPR in the UK, like the FCT High Court Rules in Nigeria, also provides that, such agreed terms must be signed by the legal representatives of each of the party or by parties themselves.Footnote 37 Additionally, the UAE Civil Procedure Code (CPC) also allow parties to reach an agreement or settlement through submission of a joint request to the court for the issuance of a judgment based on their mutual consent, which must be signed by parties or their representatives.Footnote 38

5.1 Some Judicial Authority

The Supreme Court of Nigeria held that it is the role of a judex in adjudication to encourage an amicable settlement in a suit where it can adequately meet and satisfy the end of the justice.Footnote 39 When the term of settlement becomes an order of the court, in legal parlance, it becomes a CONSENT Judgement.Footnote 40 Consent judgement is a judgement where parties to a dispute freely enter the terms of settlement. Once parties’ consent to the terms and sign it, it is no longer open to the court to adjudicate on the subject matter as it ceases to have jurisdiction thereon and the doctrine of estoppel applies.Footnote 41

In a decision of the Court of Appeal in England and Wales which established that a consent judgment must reflect a genuine agreement between the partiesFootnote 42 to be valid, and that a real and genuine agreement must be reached voluntarily by the parties. The court noted that the parties do not need to settle all the issues in dispute, if they clearly define and agree upon matters covered by the consent judgment.Footnote 43 It is finalFootnote 44 and can only be set aside on the grounds of duress, undue influence, misrepresentation, or fraud.Footnote 45

6 Conclusion

Settlements executed under the different ADR Models are valid to the extent that they adhere to the laws and rules governing them. For instance, in arbitration generally, the arbitrator validates the terms of the settlement once he/she signs the award.

In Mediation, when the parties reach an agreement upon the conclusion of the mediation, they shall enter into a settlement agreement, which they will sign themselves. The agreement will then be authenticated by the Mediator, and it shall be final.Footnote 46 It is important to note that parties validate the terms of settlement by affixing their signature in mediation, except for the CEDR Model Mediation agreement, which allows for some flexibility and offers either the parties or their legal representatives the mandate to sign the settlement terms. The requirement for settlement agreement under Singapore convention is that the parties must supply the court the settlement agreement, which is to be signed by the parties and evidence showing that the settlement agreement emanated from the mediation to the effect that there must be a Mediator’s signature on the settlement agreement. It further emphasized that the Mediator should deliver the signed document(s) signifying that the mediation was conducted, and/or the institution that administered the mediation should authenticate it or provide any evidence that the competent authority may deem acceptable.Footnote 47

While in conciliation, the terms of settlement if agreed and executed by the parties, the dispute is deemed resolved. Also, the Nigerian High Court rules, UK CPR and UAE CPC stipulates the validity of terms of settlement reached on the parties or their legal representatives. The crucial aspect of terms of settlement agreed upon by the parties and entered as judgement of a court is that it is final (binding), provided it is not marred with fraud, misrepresentation, undue influence, or duress.