I remember my first court appearance. I remember clearly because I practically did nothing. I just announced appearance (which is a legal term meaning standing up when your case is called and after parties have been called, to mention your name and which of the parties you are representing).

I am almost convinced that even without my physical presence there, the judge would have still entered judgment one way or the other. Well, the parties involved in the case had explored Alternative Dispute Resolution (ADR) and had merely come to the court to enter the result of the settlement as a binding judgment on them.

Settlement of issues between parties is not restricted only to the courts. Issues may be settled “out-of-court” or by exploring ADR mechanisms. “Out-of-Court” settlements mean that parties agreed to amicably resolve their dispute to their mutual satisfaction and without judicial intervention, supervision or approval.

Out-of-Court settlement is usually an informal affair subject to the parties’ convenience but culminates in a mutually satisfactory resolution between parties. ADR, on the other hand, is more formal and structured and may be independently explored by parties or specifically recommended by the Court in certain cases.

There is no hard and fast rule as to when and how settlement may be explored. Parties can decide to settle at any point in time before final judgment. In light of this, settlement options may be explored in the following ways:

  • Before approaching the Court at all – This is strongly advised especially by the different Rules of Courts. For example, under the High Court of Lagos State (Civil Procedure) Rules (2012), before proceedings are deemed to have been properly commenced in the court especially in matters commenced by a writ of summons, one must have executed a document to the effect that parties had explored settlement options but they were unable to settle, hence the need to approach the court to reach a decision. Here, the settlement referred to is the informal settlement agreed on by parties and referred to above. 


  • While the dispute is in court – There are different circumstances where the court will advise parties to settle or explore settlement options even while the dispute is in Court. The court may also order that parties explore ADR mechanisms. It is in these cases where exploration of ADR is ordered by the Court that parties are required to report back as to whether it was successful or not. 
    Where a settlement through any of the ADR mechanisms is successful, the Court considers the Terms of Settlement to verify that it was executed by the actual parties to the suit in court. The Court then enters same as the judgment of the Court just as if the parties had undergone the full gamut of trial after which the judge arrived at a decision. 

Why should you explore Alternative Dispute Resolution Mechanisms?

  • Saves time – Exploring settlement option saves time when compared to litigation. For example in mediation, the presence of a third-party makes for quick problem solving. Also, as opposed to traditional litigation where there are many cases on the cause list each of which require time, settlement procedures focus on only one case – your case – for that period till settlement.
  • Saves money – Settlement options also saves the parties money. The time spent in resolving a dispute reduces the expenses incurred during the resolution of the same dispute in court. Where settlement options are explored, money is saved in the long run.
  • Makes for more agreeable decisions –  Where settlement involves third parties assisting the parties to come to a mutually benefcial agreement, the expertise of such third parties may influence the decisions reached by the parties. This will ultimately influence the quality of those decisions.
  • Manages and restores relationships – This may perhaps be regarded as one of the main advantages of choosing settlement out-of-court. It usually results in a win/win situation for parties because parties reach a decision that is favourable to them after proper consideration of facts and circumstances. This usually maintains the good relationship between the parties as opposed to a regular court decision that usually results in a win/lose situation in order to ensure that justice is served.
  • Privacy of the parties is protected – In traditional litigation, proceedings are usually held in public (in the court-rooms) but where parties take the settlement route, they are guaranteed privacy in addressing issues and reaching a decision. 

Alternative Dispute Resolution (ADR)
This is a formal and structured method of resolving disputes without litigation. Unlike out of court settlement which is informal and has parties and representatives meet informally to settle their disputes, ADR is more structured and procedural. There are different mechanisms of Alternative Dispute Resolution which serve as alternatives to litigation. These mechanisms are as follows:

Arbitration: This is a dispute settlement approach where one or more persons are appointed, usually on the joint agreement of the disputing parties, to reach a binding decision on a disputed matter. In Nigeria, the process of arbitration is codified in the Arbitration and Conciliation Act as well as in the Lagos State Arbitration Law, 2009.

Although arbitration is a settlement option, it has been argued that it is a bit similar to litigation. While there are certain matters which may be settled by arbitration, others cannot be so settled. Some arbitrable matters (matters that can be settled by arbitration) are: breach of contract, matrimonial causes (excluding divorce or dissolution of marriage), compensation for acquisition of land, etc. Non-arbitrable matters include: criminal disputes, disputes where the interpretation of the constitution or some other statute is in question, election petitions, etc.

The arbitration process in Nigeria involves the following:

  • The option of arbitration may be resorted to where the parties have inserted an arbitration clause in the agreement in dispute between them. In some other cases, statutes may prescribe arbitration as a mode of resolving certain disputes. Parties may also opt for arbitration even where there was no clause in their initial agreement to that effect or statute prescribing it. The courts may also refer parties to arbitration.
  • The arbitration process usually commences with the declaration of dispute stage. It is a notification by one party to the other of the existence of a dispute and the attendant option of arbitration.
  • Arbitrators are then appointed by either the parties, the existing arbitrators, an institution or by the Court. There could be more than one appointed arbitrator.
  • The arbitrators and the parties to the dispute may meet to discuss certain processes that may be required for the proceedings.
  • The parties then present their respective cases in the form of a claim and defence.
  • The hearing of the parties by the arbitrator(s) follows.
  • Finally, the arbitral tribunal makes an award after the hearing of the case. The award is basically the decision of the arbitral tribunal after the hearing of the case.