Uncategorized – Akakpossa Fils & Associates

HIGH COST OF ARBITRATION

Akakpossfils — Mon, 27 Feb 2023 14:04:22 +0000

High Cost of Arbitration

In some jurisdictions, for example Nigeria, a common law jurisdiction, high cost of arbitration is a major argument against the option of this form of alternative dispute resolution (ADR) when compared with litigation. This high cost of arbitration is not unconnected to the reason for increase in third party funding.

Of a truth, I have some reservations about third party funding; however, I would not attempt to state my reservations now, to avoid digression.

A writer once opined the reason for high cost of arbitration. He stated that, in jurisdictions plagued by frivolous litigations that frustrate the legitimate expectations of commercial parties, the relatively higher cost of arbitration, vis-à-vis litigation appears to be a reasonable quid pro quo. A litigant who is party to an arbitration agreement is less likely to pursue a frivolous or speculative claim, when confronted with the reality of the likely costs involved.¹

Costs must be incurred for the arbitral process to proceed well. These costs include: arbitrator’s fees; costs of securing the arbitration venue; costs of providing transcripts; legal fees of advocates; expert fees; disbursements; and other allowances.² Thus, it could be understood the reason for cost, in arbitration.

However, the increasing costs of arbitration, therefore, imposes a financial barrier to access to justice since it deters poor claimants from prosecuting their claims, and, alternatively, forces poor defendants to settle claims due to the fear of having to pay high costs should they lose.³

Cost effectiveness used to be a major attraction to arbitration in the past, and that made it indeed an alternative to the regular court dispute resolution. It is therefore imperative that arbitration bodies both nationally and internationally should find a way to reduce the cost of arbitration for prospective parties.

I surely believe that this is very possible and realistic.

¹Ajibade Babatunde, ‘Nigeria: Much Ado About The Cost Of Arbitration’ (Mondaq, 2 February 2021) < https://www.mondaq.com/nigeria/trials-amp-appeals-amp-compensation/1031990/much-ado-about-the-cost-of-arbitration-> accessed 18 February 2023

²Muigua K, Settling disputes through arbitration in Kenya, Glenwood Publishers, Nairobi, 2012, 161

³Ng’etich Raphael, ‘The Current Trend of Costs in Arbitration: Implications on Access to
Justice and the Attractiveness of Arbitration’ (2017) Alternative Dispute Resolution 5(2) 2017, 111-129, accessed 18 February 2023

LAW AND GOVERNMENT REGULATIONS ON BUSINESSES IN NIGERIA

Akakpossfils — Mon, 18 Jul 2022 01:39:55 +0000

INTRODUCTION

For every society to maintain orderliness and organization in a particular sector there is a need for a set of rules and directives. This set of rules and directives made and enforced by an authority is called a Regulation. The authority responsible for making and enforcing these regulations are simply called – Regulators. Pertaining to our subject matter of discourse, our focus is on Business Regulations. We will not be focusing on particular regulators or regulations. The brevity of this write-up would not permit us to deal extensively with the regulators, but it would be a qualitative discourse.

THE HIGHLIGHT OF REGULATORS IN BUSINESS OPERATIONS IN NIGERIA

In Nigeria, there are different regulators responsible for various aspects of business operations particularly relating to entrepreneurs and MSMEs. The following regulators are generally the most active regulators in the business industry of Nigeria:

Corporate Affairs Commission (CAC)
Federal Inland Revenue Service (FIRS)
State Internal Revenue Service (IRS)
National Agency for Food and Drug Administration and Control (NAFDAC)
Standard Organization of Nigeria (SON)
Nigerian Communications Commission (NCC)
Nigeria Customs Service (NCS)
Ministry of Industry, Trade and Investment – Trademarks, Patents, and Designs
Nigeria Copyright Commission (NCC) etc.

Please note that as a business owner or an entrepreneur, you are likely to have dealings with a minimum of 4 Regulators in your field. For example, when you decide to engage in the business of Pre-Packaged Food Manufacturing. The first point of the call is to register your business with Corporate Affairs Commission (CAC). Before you begin to manufacture for sale, you need to register with NAFDAC. One of the requirements to register with NAFDAC is Evidence of Registration of Brand Name with the Trademark Registry in the Ministry of Industry, Trade and Investment. After the commencement of business, the business and business owners begin to pay applicable taxes to the FIRS and SIRS respectively. From this above, the business owner has had cause to deal with 5 regulators over one company.

Even though business owners may not be lawyers and are not expected to know all these laws, there are basic principles of business laws that an entrepreneur or a business owner should know to avoid some business calamities.

ENACTED LAWS AND REGULATIONS

Every regulator in the business industry is a child of one law or the other. These parent laws provide for various rules and regulations to guide the operation and workings of its sectors. The laws further empower each Regulatory Agency (regulator) to make regulations to control and direct the affairs of players in the industry.

For example, National Agency for Food and Drug Administration and Control Act (NAFDAC Act) summarises the aim of the agency as follows: to among others, regulate and control the importation, exportation, manufacture, advertisement, distribution, sale, and use of food, drugs, cosmetics, medical devices, bottled water, and chemicals.

As a business owner, it is very imperative to know the basic principles of law or seek legal advice concerning it. This basic knowledge should center on the following:

Pre-Incorporation and Post-Incorporation Laws
Tax Laws

iii. Employment and Labour Law

Intellectual Property Law

Licensing, Approvals, Permits, Prohibition Regulations, etc.

One may not know how crucial knowledge is until one’s business is specifically affected. Imagine a business owner who saw some goods online, paid, and bought them but could not bring them into the country because the goods fall under Prohibited List.

So, it is very critical that an entrepreneur seeks professional guidance regarding prevailing laws and regulations in any area of business he/she intends to enter or invest in.

CONSEQUENCE AND PENALTY

Penalties for contravention against provisions of Laws and Regulations differ from one Regulator to the other and also from one offense to another. Irrespective of which contravention or Regulator, the penalties include the following:

Fine
Imprisonment

iii. Forfeiture etc.

GENERAL LAWS AND PRINCIPLES IN CONTRACTUAL BUSINESS RELATIONSHIPS

Akakpossfils — Wed, 01 Jun 2022 11:22:23 +0000

As an entrepreneur or a business owner, it is important to note the following as business transaction is concerned:

When entering into a contract, the business owner should enter such a contract in the name of his/her business. This is to forestall situations in which the business owner becomes liable for the acts of the company. However, when a business is yet to be registered, the owner should not enter into a contract in such a name as such a contract becomes unenforceable. Only a registered business has the capacity to enter and enforce a contract.
Also, in cases where the other party in a contract is a corporate entity, it is essential that you verify the registration status of such company, as it is commonplace to see persons that carry out business transactions with unregistered names, enter an agreement in such names. If it happens that you enter into a contract with an unregistered organization, enforcing such a contract on the organization will usually pose some challenges and difficulties.

iii. There are generally two forms of contract: Oral Contract and Written Contract. It should be noted that the two are enforceable in law. Nevertheless, it is advisable that you reduce your agreement into writing either by yourself (even though not always expedient and wise) or through a lawyer. A written agreement is easily proved in court in the event of disagreement or dispute between parties. In your business engagements, it is important you avoid handshake agreements or gentleman agreements.

In any transaction that involves an exchange of money, I will further advise that the handing over to the other party should be in a form that is traceable and evidential – either through the issuance of a cheque, bank deposit, or electronic transfer. In a situation where the money is paid in cash, the receiver should be required to acknowledge the receipt in writing. It is advised that cash payment without proof should be completely avoided. Aside from issues of denial of receipt of such money, there are many issues that can come up that would warrant proof. There is a case we handled recently, where a man collected some money but died before the execution of the business transaction. The family of the deceased was not willing to release the money to the partners as no evidence to prove it.

Also note that it is unwise to sign an agreement that you have not read through and understood or given to your lawyer to study and advise you appropriately. Very recently, social media was flooded with the news about an artist who did not read her contract (or did not read well) before she signed. It happened that she already mortgaged her name and identity. Many have fallen into this trap, many others are still falling, and more will still fall into the same trap.

vii. Exposing your names, ideas, and any of your intellectual property without registration and/or protection usually leads to sour regrets. Imagine you have started building customers and clientele around your name or logo for about 3 years. Then you decide to register the same but discover an existing or similar one to it.

viii. Protection of your Intellectual Property (IP) through copyright, trademark, design, and patent, whichever is appropriate, is very crucial. These protections are available to protect your Intellectual Property against infringement. Many entrepreneurs in their desperate search for partners or investors tend to expose all their ideas, works, and products. Unfortunately, some would-be investors reject their offer and turn around stealing ideas, work, or products. Irrespective of how cheated the owner of the IP might feel, if not registered it would be very unlikely to succeed if he/she sues for infringement.

x. Irrespective of your kind of business, whether Micro, Small or Medium, there is a need for you to retain a lawyer for yourself. What a lawyer’s advice will save you will be nothing compared to what you could lose if you make the wrongful step on the side of the lawx