One of the factors that discourage investments, particularly from foreign investors, in developing countries is the absence of an effective and reliable dispute resolution mechanism.
Nigeria, in particular, is of great interest to foreign investors across the globe. Rich in natural resources, and with a diversifying economy, Nigeria offers a sophisticated legal market and a very active dispute landscape.
Nigeria has extended the areas of economic development to creative applications of the law. This is because economic and social developments depend on effective legislation and the judicial system.
However, slow and costly court proceedings have deterred many from investing in Nigeria. This is because investors consider the strength and independence of the judiciary, amongst other factors, before making an investment decision.
Investors who are increasingly looking for a supportive rule of law that would provide the vital reassurance of the safety of investment, protection and room for safe and fair access to redress are turning away from courts mainly due to delays in the resolution of disputes and lack of independence of the judiciary.
In an increasingly competitive global financial system in which countries try to out-compete each other for investment inflows, governments across the world are launching reforms to strengthen their judicial system, while many emerging markets are empowering their financial system regulatory agencies to give investors adequate comfort and protection.
Moreso, countries with an efficient judiciary system, in which courts enforce contractual responsibilities, have gained more advanced credit markets and a higher level of growth.
At the seventh Triennial Delegates conference 2022 of the Independent Shareholders Association of Nigeria (ISAN) held in Lagos at the weekend, stakeholders lamented that the nation’s judicial process has certainly become a tool to blunt the enforcement mechanism of regulatory institutions due to unnecessary delay in judicial processes.
According to them, Nigeria is one of those countries that have strengthened regulators of the financial system by reviewing the relevant laws. The NDIC Act, CBN Act, Pensions Reform Act and Investments and Securities Act, CAMA have all been reviewed over the last decade to enhance the powers and functions of regulatory agencies in charge of various sectors in the financial system.
However, stakeholders argued that a situation where regulatory authorities’ efforts to attract more investment into the country are being threatened by weak judicial processes, especially in the areas of the delay in adjudication and unnecessary adjournment of cases has become worrisome.
According to them, creating accountable and impartial court systems that will be responsive to public needs is not enough but must also be efficient and accurate to ensure government is responsive to its constitutional obligations, secure property rights, reduce uncertainty, and promote economic development
Specifically, Chuks Nwachukwu of Indemnity Partners Limited categorically stated the nation’s judicial system is beset with several deficiencies in its procedural set-up that make it very difficult to obtain justice and quick resolution of disputes in courts.
Nwachukwu also pointed out that a sizable percentage of judicial officers in Nigeria falls below the standard expected of judicial officers in intellectual capability, uprightness, character and integrity.
According to him, this has continued to reflect in the poor quality of judgments delivered by the various courts in Nigeria and the growing problem of conflicting judgments and the attendant confusion it brings to the legal system in Nigeria.
He noted that Nigeria represents a case study on how to deny justice through permanent delay, noting that no fewer than 15,000 cases are awaiting appeal in Nigeria.
Presenting a paper titled: ” The Nigerian Judiciary and The Nigerian Economy,’ Nwachukwu said: “In my over three decades of being a litigation lawyer, my summation of the system is that justice is a miracle that happens once in a while.
“Justice in Nigeria reminds one of the biblical pool of Bethsaida where an angel would appear once in a while unexpectedly to stir the water and the first to get in the pool afterwards would be healed.
“Some land cases in Nigeria have lasted as much as 60 years only to end in futility over one technicality or the other.
“The court, most times, does not pay attention to the proof of evidence attached to the charge to assess the seriousness of the case that the prosecution has to sustain the charge against the defendant before pronouncing terms and conditions of bail.”
He cited Lagos State where considerations of revenue drive have crept into the bail process.
“We have the courts demanding tax clearance certificates that have been verified by the tax authorities and affidavits of means with title to which should be verified by the land’s registry.”
Nwachukwu argued that the nation’s economic development cannot be propelled without an effective developmental programme, efficient agencies to drive it as well as an enabling environment for all to participate.
Therefore, he submitted that to maintain and sustain public confidence, as well as promote investment in the economy, the judiciary must not only be fair and impartial in administering justice, but also in the resolution of disputes. More so in judicial adjudication of cases, the importance of the court’s timely dispensation of justice is significant both for accountability and also on accuracy.
He pointed out that laws and policies must be such that they provide practical benefits for investments and attract local and foreign investors in the economy, especially from agreements made with others.
Nwachukwu stated that the degree of judicial independence is correlated with economic growth, adding that a stronger judiciary is associated with the more rapid growth of small firms as well as with larger firms in the economy.
Company Secretary, Greenwich Securities, Yetunde Apomolede, said timely and efficient adjudication of cases enhances stability in the Nigerian economy.
“The public has lost confidence in the independence of the judiciary. Nigeria is a country where corruption has thrived extensively and has led to so many issues. From time to time, the executive has intimidated the judiciary in its operation.
“We need a system that will change this narrative and understand that the judiciary needs to remain independent to carry out their functions efficiently,” she said.
Former Secretary/ Legal Adviser, UAC Nigeria Plc, Godwin Samuel said trust and confidence can be easily eroded where there are delays and inefficiencies in speedily resolving disputes arising from the sector.
He also tasked the Judiciary to create and embrace online payment platforms to ease the filing of court processes to eradicate delays associated with manual processes.
According to him, there is a need for the judiciary to proactively position itself to meet the challenges posed by the dynamics and innovations of the digital age by streamlining several rules of court to embrace and encourage quick methods of dispute resolution.
Samuel added that creating a judicial court system that will be responsive to public needs is not enough but must also be efficient and accurate to ensure the government is responsive to its constitutional obligations, secure property rights, reduce uncertainty, and promote social and economic development.
President of ISAN, Dr Anthony Omojola stressed the need for the government to focus more on strengthening the capacity of the judiciary through better funding and implementing other measures that will help eradicate corruption in the system.
He also advocated improvement in the condition of service of judicial officers.
He said: “Our Judiciary needs reforms to stabilise and encourage growth in the economy. There is a need to introduce measures that are fundamental to the independence of the judiciary.
“We also need to reform and build a justice system which is affordable, efficient, independent, transparent, and accountable to attract more investment in Nigeria,” he said.