By Victor Sunji, JP, PhD, ACArb
Introduction
Wherever dispute arises, the judiciary is always the last hope of the common man. With project management harnessing the scheduled administrative, economic, technological, social and human resource complexities within defined environments, experts must expect that ensuing human interactions eventually leading to differences in opinions is rife and unavoidable. Interestingly, conflict management is one of the skills a Complete Project Manager is required to possess. While this skill is handy at the formative stages of disputes, more elaborate dispute resolution mechanisms would be inevitable for complex stages of conflicts that could occur in the project management lifecycle.
Project Management
With the author’s illustration of a project as “a chain having several jointed parts (activities), with each end necessary for the other to begin”, the consequent process of managing a project shall require the creation of a standardized sequence to harness the evident complexities of its many jointed tasks (activities) regardless of size, cost and location. This standardized sequence for achieving a specific result within the confines of time and budget is what is known as project management – an embodiment of four knowledge pathways, namely, management science, organizational behaviour, financial forecasting and budgeting, according to the Project Management Institute (PMI). The biases that create sundry definitions in project management all link her benefits to economic planning and sustainable development. Hence, the two distinctive features between project management and similar disciplines are:
- The presence of the peculiarity of a product, and
- The absence of the infinitude of time
These two factors separate project management from operations management, which produces the same outcome because it is usually a continuing and repetitive process. Cost is the third factor, but it is common to both project and operations management disciplines.
Legal Framework for Project Management in Nigeria
As of today, only the Chartered Institute of Project Managers of Nigeria (CIPMN) has secured a Presidential Assent; although some others are still in the process, none has been able to fully navigate through the political and diplomatic hurdles therein. The Institutes in the process of securing the passage of their Bills by the National Assembly have resorted to getting approvals and registration with other organs of government. The Corporate Affairs Commission, Federal Ministry of Education, the Federal Ministry of Justice, and the Centre for Management Development provide legality for them.
The President signed the CIPMN into law in 2018 as one of the professional Institutes in Nigeria and placed it under the supervisory responsibility of the Federal Ministry of Industry, Trade and Investment. The CIPMN (Establishment) Act, No. 3 of 2018 Gazette No. 15, Vol. 105, came with the full legal responsibility for the registration and discipline of their members and for the other related matters.
THE ADR – ARBITRATION BRIDGE
Arbitration is simply the settlement of disputes by a neutral person (who may not necessarily be a trained judge or stipendiary magistrate). It derives its authority from a prior mutual decision by the contracting parties to adopt such settlement option; and except the instrument (a separate written arbitration agreement or a clause in a contract agreement) which institutes this ‘mutual decision’ is also mutually revoked before arbitral proceedings, the decisions (award) by the arbitrator(s) remains binding, enforceable, legally valid and final.
The concept of Arbitration and ADR became a valuable lifeline in the overall administration of justice in Nigeria, particularly in commercial disputes, when the limitations of the litigation method of dispute resolution were unabated due to the congestion of courts, costs and attendant delays. The Nigerian law fortifies ADR practices within the country, regulated by the Arbitration and Conciliation Act (ACA) CAP 18 LFN 2004. The force of Arbitration is so compelling that even the death of a party to an arbitration agreement cannot vitiate the institution of arbitral proceedings thereto; the Act in Section 3 says:
“An arbitration agreement shall not be invalid by reason of death of any party thereto but shall, in such an event, by enforcement by or against the personal representative of the deceased”
It will interest project managers to know that Arbitration is not open-ended in its appointments and communications. Article 6(2) in the First Schedule of ACA (2004) stipulates that:
“If within thirty days after receipt by a party of a proposal made in accordance with paragraph 1, the parties have not reached agreement on the choice of a sole arbitrator, the sole arbitrator shall be appointed by the court”;
While Article 23 of the Second Schedule reads:
“The periods of time fixed by the arbitral tribunal for the communication of written statements (including the statement of claim and statement of defense) should not exceed forty-five days. However, the tribunal may extend the time limits if it concludes that extension is justified.”
From the above submissions amongst many others, Arbitration is intentional on the sustenance of a critical project resource – Time, which remains central in preventing costs overruns in projects; and litigation will most certainly not ensure this.
Very often, it is mistaken that only lawyers can act as arbitrators, but the ACA CAP 18 LFN 2004 does not specify any particular academic qualification or social status that a person must possess before he can act as an arbitrator; however, an arbitrator must not be deficient in skill and character. While the skill would best secured by an adjunct career, the character would be developed by training and exposure.
Arbitration, and Conflict Management in Project Management Ecosystems
Project management proceduralizes tasks to achieve a new product; dispute being a byproduct of human relations forms a significant feature in the cross-functional relationships necessary to bring projects to successful completion. The number of persons required to execute project management makes it experience many sources of potential conflicts; and according to the Project Management Institute Body of Knowledge (PMBOK, 5th edition), “conflict is natural and inevitable in a project environment”, and its sources include scheduling priorities, scarce resources and personal work style, all of which ‘forces the search for alternatives’. Therefore, as project managers navigate the five stages of team-building (forming, storming, norming performing and adjourning), they are also constantly confronted with both internal organizational conflicts as well as external societal influences, which I have classified as statutory externalities in the project management ecosystem.
The PMBOK believes that “successful conflict management results in greater productivity and positive working relationships”; to this effect, it recommends the early and private management of conflicts using a direct, collaborative approach to ensure a satisfactory resolution and prevent escalation. These undoubtedly, are features of ADR and Arbitration.
As a credible alternative to litigation, Arbitration has evolved to gain visibility and public confidence in diverse formations and different sectors of the society. I shall limit the resource centers to a few that concern project management and its forms.
- Nigeria Institute of Chartered Arbitrators (NICArb)
Currently with footprints in about ten states of Nigeria, the Nigeria Institute of Chartered Arbitrators is the premier arbitration/ADR institute in Nigeria and the largest in Sub-Saharan Africa after being established 42 years ago. In ten years, the Institute has almost quadrupled her presence from just three centers (Bayelsa, Enugu, and Lagos) to its current size.
Her strategies for promoting the domestication and penetration of ADR include advocacy, capacity building, research, arbitration center, arbitration referral services, strategic partnership and program development. With her large database drawn from different career spheres, NICArb is able to handle commercial, construction, investment and maritime arbitrations through her sectoral committees
- Society for Construction Industry Arbitrators (SCIArb)
As the name implies, this industry-specific body is a specialized collection of industry experts who are also trained as arbitrators to tackle and resolve disputes that may arise with construction value chain. It comprises experts from architecture, building, engineering, town planning, quantity surveying and others. Given that construction projects are a hub for sundry professionals, only professional expertise and experience can determine a case; the Society for Construction Industry Arbitrators was founded in 1993.
- International Arbitration Institutions
At the crux of Arbitration is the quest for sincerity of purpose by a neutral expert who would not by swayed by sentiments or fall to ‘inarticulate ideological premises’. This informs reasons why parties to arbitration agreement/clauses may choose to refer their disputes to foreign arbitration institutions to settle disputes outside the location (country) of transaction.
Some of the famous institutions are; Court of Arbitration of the International Chamber of Commerce (ICC), International Centre for Dispute Resolution (ICDR), London Court of Arbitration (LCIA), American Arbitration Association (AAA), International Dispute Resolution Institute (IDRI), United Nations Commission of International Trade Laws (UNCITRAL), International Centre for the Settlement of Investment Disputes (ICSID)and many others.
Conclusion
Although disputes are inevitable, they are also manageable; in fact, the PMBOK does not believe that projects will attain closure (successful completion) without conflicts, hence its introduction of the assertive, collaborative, avoidance and cooperative styles of reaching compromise in human resource process management. However, this is just useful for internal conflicts management; when disputes happen outside the project management ecosystem, a more elaborate approach is required.
REFERENCES
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- Delliote Report (2020). Africa Construction Trend: Infrastructure and Capital Projects. Delliote.
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- Chen, J and Kelly, Robert C. (2021). Economic Failure. www.investopedia.com; retrieved October 11, 2021.
- National Judicial Institute (2020). ADR Court User’s Guide 2. United Nations Office on Drugs and Crime.
- Nwakoby, Greg and Ibe, Chukwuemka (2014). Striking a Balance for Court Intervention in Arbitration. Chartered Institute of Arbitrators Nigeria, Journal of Arbitration; Volume 9, Number 1.
- Project Management Institute (2012-17). Project Management Body of Knowledge (5th Editions). PMI.
