The Perceived Relationship Between Arbitration and Terrorism

In today's world, terrorism has unfortunately become a phenomenon in the global community. Over the past decade, different forms of domestic and international terrorism have been witnessed around the world. Nigeria on its part has experienced several attacks by the Boko Haram terrorist group in the last few years with numerous casualties.


According to the United Nations, terrorism can be defined as “criminal acts intended or calculated to provoke terror in the general public, a group of persons or particular persons for political purposes that are in any circumstances unjustifiable.” Irrespective of the choice of definition, terrorism has frequently been described or associated with features such as outlaws, insurgency, violent crimes, conflicts, guerrilla warfare, organized crime, militancy, armed rebellion, extremism, deviants from rules and conventions, use of political violence and so on.

This phenomenon called terrorism will still take the center stage for some time to come because:

(a) There appears to be social and political discontent in many parts of the world to such extent as to enable fanatic terrorist groups not only to operate in secret for a long time but also to successfully recruit new members to join the various groups.

(b) It is also unlikely that the tension between the capitalist western countries and some of the people of Islamic countries will disappear in the nearest future. The inability to accept global multi-culturist societies, arguably on both sides is one underlying reason for the global insecurity.

(c) The worldwide struggle against terrorism both local and international might still continue until there is political and cultural stability in most of the underdeveloped parts of the world (especially in the Muslim countries).

Terrorism is not new in Nigeria, but the latest insurgency in Nigeria is the Jama'tu Ahlil Sunna Lidawati Wal Jihad popularly known as "Boko Haram", which means, "western education is forbidden". This terrorist group has brought about heightened tension, anxiety, sense of insecurity, state of emergency and loss of lives and properties in Nigeria.

Terrorism is no more mere inconvenient news we hear every two or three years. The ISIS group, Boko Haram activities and most importantly the United States World Trade Center attack have changed our thinking and way of life. We have now come to realize that these terror groups can hit at anytime and anywhere. We now live in the world where steps are being taken to prevent and suppress local and international terrorism politically, socially, culturally and economically.

This brings us to the question "How will Arbitration as a dispute resolution method be affected by terrorism?”

International Arbitration is a formalized method of settling disputes whereby parties to a contract agree to submit any dispute, differences or claims arising out of their commercial transaction to a person or institution chosen by them (an arbitrator) to determine the dispute in accordance with a body of law chosen by the parties and arriving at a binding decision termed "an award". A dispute cannot be submitted to arbitration in the absence of a valid arbitration or submission agreement between the parties.

Arbitration is commonly used for the resolution of commercial disputes, particularly international commercial transactions. It is also used to resolve disputes such as labor disputes and consumer disputes. As the number of international dispute increases, so does the use of arbitration to resolve them.

As there is no precedent to guide us as to what might happen in the next few years or decades between international terrorism and international arbitration, we can only speculate.

There are few areas, which might be affected by international terrorism, and some of them are:

(a) Direct and indirect consequences on persons, properties and economic activities as a result of a particular terror attack.

(b) Direct and indirect consequences on persons, properties and economic activities as a result of steps (including violent steps) taken to suppress terrorists attacks.

In tackling the above-mentioned areas, we shall be making references to the United States World Trade Center attack of September 11, 2001 and the various Boko Haram activities in Nigeria.

The immediate casualties of terrorist attacks are normally innocent victims. The death and or bodily or psychological injuries as a result of terrorist attacks can often trigger off contractual liabilities, the dispute of which might require resolution by arbitration. Examples of this might be life, accident, health, and insurance policies, contract of employment and pension schemes. Persons injured might have claims, which will be subjected to arbitration clauses.

People may also lose properties as a result of terrorist attacks. For example loss of properties as a result of the terrorist attack on the World Trade Center in the United States was monumental. Properties lost included both real and personal properties. Some of the offices inside the World Trade Center would have been subject of leases, sub-leases or agreements with arbitration clauses providing for dispute resolution. Property lawyers on the one hand will probably spend days discussing the many implications on the leases arising from the collapse of the World Trade Center building.

In July 2001 Silverstein Properties apparently acquired the lease of the World Trade Center from the Port Authority New York. Herald Tribune reported that Silverstein Properties was seeking $7.2 million from the insurers. The insurance claim was made on the basis of two separate occurrences therefore entitling Silverstein Properties to collect $3.6 million dollars on each separate attack on the building. The underwriters were reported to contend that there was only one occurrence as the two attacks were coordinated. If the insurance contract contained an arbitration clause, then the arbitration over the insurance claim would certainly have been a very large claim.

What is even more difficult and almost of unprecedented complexity will be the working out of the economic losses from the inability to carry out contractual obligations arising out of the destruction of the World Trade Center building. Tens of thousands of contracts must have been affected by the terrorist attack and many of these might require dispute resolution by arbitrators.

In the past when terrorist attacks were confined to embassies, warships or aeroplanes, the economic losses resulting from such attacks were relatively easy to work out. But the attack on the World Trade Center was of a totally different dimension. It was not just a case of five thousand lives lost but was a total destruction of one of the most important workplaces where huge amounts of business activities were carried out and where different enterprises had entered into contracts worth hundreds of thousands millions of dollars, many of which were adversely affected by the double attacks.

It will not be therefore too speculative to conclude that any terrorist attack involving loss of lives, loss of properties and loss of economic activities might result in disputes of contracts requiring resolution by arbitration.

With the increase in terrorist attacks, lawyers should now look into advising and drafting relevant clauses exempting liabilities arising out of terrorist attacks. In some cases security experts will have to be brought in to advise on the exposure of a particular company to terrorist attacks.

No comments:

Powered by Blogger.