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CAPITULO II MARCO TEORICO

2.1. ASPECTOS GENERALES SOBRE PRECIOS DE TRANSFERENCIA

2.1.3. ORGANIZACIÓN PARA LA COOPERACIÓN Y DESARROLLO

Litigation as an adversarial process of dispute resolution involves a situation where the parties use the State courts to assert their legal rights (Menkel-Meadow 1999). In the light of the parties or stakeholders involved in the Niger Delta conflict, as discussed in chapters one to four, the suitability of litigation is questionable in many ways. Generally, the method available for resolving disputes between two or more parties from the same country is through that country’s courts. But when a dispute arises between parties of different countries, as is the case in the conflict at hand, the parties are faced with making the difficult choice of which country’s domestic courts to use for the resolution of that dispute.

Assuming the parties can reach an agreement on that front, they are then faced with other issues such as the jurisdiction of the courts, the laws of the country and dissimilarities in legal systems. The laws relating to jurisdiction of courts in a given country are not made in cognisance of transnational disputes; they are designed to resolve domestic disputes, that is, disputes arising between two parties of the same country, hence adjudicating between parties from different jurisdiction can be difficult. In terms of dissimilarities in legal systems, where, for example, one country might practice the common law system (as is the case in Nigeria) and the country of the other party (such as is the case in France) the civil law system. This again presents another significant challenge, notwithstanding efforts by many international organisations and institutions, with unification or uniformity of different legal systems still a distant dream (Unitare 2001).

Furthermore, the unsuitability of litigation as a conflict management tool or model is predicated in the determination that litigation is seen by the communities as vindictive, complicated, expensive, and not fostering wide participation by stakeholders. Trials are

offender-centred and the deterrent effect of punishment remains largely unproven. Even where the victim’s desire for justice is assuaged through the punishment of the offender, this often undermines the equally important goal of promoting victim-offender reconciliation and restitution. Therefore, the adversarial system appears to be a cure that often leaves society worse off than the ailment, especially in the context of post-conflict fragile peace which necessitates non-violent co-existence between hitherto warring groups. The misfit between Western law and African society is captured by Idowu William in these words “… In the West the judicial system is constructed after the manner of winner takes all, in African jurisprudence, what rules is the idea of no victor, no vanquished” (William 2001: 13-14).

Additionally, the uneducated rural dweller in Nigeria is “litigophobic” and would rather take a matter before a council of elders, a chief or a spiritual leader for counselling and resolution. Even among the educated, a man who takes his brother or associate to court is seen as an enemy for life, due to the battlefield psychology associated with litigation. The lawyer who should be a problem solver is often seen as part of the problem, sapping litigants of their hard-earned entitlements through exorbitant legal fees (Uzoechina 2008: 12).

Moreover, the fact that litigation is ostensibly directed at addressing narrow procedural and legal issues instead of resolving underlying problems relating to policy, it often times fails to resolve the real differences between the contending parties. For example, a challenge to setting up an oil exploration plant may be based on the granting of a licence without holding a public hearing, but the policy questions at the heart of the controversy (e.g. should the plant be built at all? What are the alternatives for supplying energy needs?) are rarely addressed by the courts and therefore such questions do not get resolved. In addition to the points already discussed, the following section details other explanations for the

incompatibility of litigation as a basis for the resolution of oil and gas related conflict in the Niger Delta region.

Slow Process: Courts can be slow in arriving at decisions in disputes brought before them.

The oil industry is one which involves huge investment, and is under constant pressure to produce; each day in which there is no production as a result of dispute, results in losses which run into millions of dollars (Roberts 2004:313). The average life span of a court case in Nigeria from commencement at the trial court to judgement at the Supreme Court is about 16 years (Osinbajo 2004: v-vi.) In addition, a 2006 survey of 200 cases in Lagos State of Nigeria that went from different High Courts in the Federation to the Supreme Court was undertaken. The outcome was that it takes an average of 10 years for a criminal case to go from the High Court to the Supreme Court. The figure is 14 years for a civil case, and 18 years for land cases. This shows the inadequacy of the justice system and how it has

effectively become an obstacle to efficient justice delivery. A locus classicus in this respect

is the case of Ojinnaka Uzoechina v. Sunday Ononye (Suit No: 0/185/75). The case

commenced in 1975 at the State High Court. 32 years after its commencement, the case is still being heard at the High Court after being transferred from one judge to another.

Fascinatingly, the original parties who are long deceased have been substituted with their surviving offspring. Unnecessary delays such as these may occur in Nigeria and other countries where the judicial system requires reform. The much-needed reform must include areas such as increased funding for the provision of technology/ ICT services and training so that services that are currently delivered manually can be done technologically to expedite the justice process (Uzoechina 2008).

Rigidity: The court follows very rigid procedures that in certain circumstances may not

meet the peculiar needs of the Oil Industry. For instance, where a key witness to an oil dispute is abroad, the courts (with few exceptions) will have to hold the case till he returns.

As discussed above, the same antidote may apply, in addition to a reform of the civil procedure of the court.

Neutrality Concerns: oil companies are always unwilling to submit disputes to the national

courts in the developing countries in which they operate, because they do not trust the competence or independence of the judges in these countries.

Lack of Confidentiality: Litigation is typically conducted in public and proceedings and

judgement will be matters of public record.

Cost: Litigation is generally more expensive than an alternative dispute resolution process.

In most jurisdictions, considerable sums of money are spent in case filing fees, hiring of lawyers.

Damage of Relationships: Thomas Walde notes that litigation tends to make it much more

difficult for relationships to continue thereafter. This is because court processes are adversarial in nature. Litigation breeds mutual antagonism. The participants in the oil industry are repeat players and it is in their interest to preserve their relationships (Frynas 2000).

In 1998, the Shell Petroleum Development Company (SPDC) in Nigeria had about 500 cases pending in the Nigeria law courts. About 350 or 70% of these cases were related to oil spill compensation claims. During the same year, Chevron was involved in 200 cases in the courts. About 180 of these cases were related to oil spill compensation claims (Frynas, 2000). In 2003, SPDC had 221 oil spills and paid out US$3.2m as compensation (Shell Petroleum Development Company, 2003). Between 1999 and 2003, SPDC alone had 1426 oil spills. The upsurge in court cases (especially compensation claims) in the oil-bearing Niger Delta of Nigeria has once again called into question the effectiveness of the present legal system. The institutional and structural weaknesses in the judicial system have led to a situation where in most cases; disputes spend an embarrassingly long time in court. The

convoluted court processes and strict reliance on formality and rigid procedure which are some of the features of common law have contributed to worsen the situation.

Having explored the different approaches /methods employed by the various parties, where different strategies have been employed at various points in time following the realization

that a particular method has failed to work, it calls for a structured, proactive approach to

conflict management rather than a reactive one. The next step, therefore, is to embark on a

diagnostics phase in order to arrive at a viable model.

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