A Q&A guide to arbitration law and practice in Nigeria.
The country-specific Q&A guide provides a structured overview of the key practical issues concerning arbitration in this jurisdiction, including any mandatory provisions and default rules applicable under local law, confidentiality, local courts' willingness to assist arbitration, enforcement of awards, and the available remedies, both final and interim.
Legislative Framework
Applicable Legislation
1. What legislation applies to arbitration?
The Arbitration and Mediation Act, 2023 (AMA) is the main arbitration legislation in Nigeria and repealed the Arbitration and Conciliation Act. Some of the AMA innovations relate to third party funding, appointing emergency arbitrators, joinder of parties, arbitrator immunity, and an arbitral award review tribunal.
The Arbitration Law of Lagos State 2009 (AL 2009) applies to all arbitration in Lagos State except where the parties expressly exclude it (section 2(1), AL 2009). If the parties expressly exclude it, any other law specified by the parties in place of the AL 2009 (the AMA or another arbitration law) applies. There is an ongoing debate about whether Lagos State, as part of the Federal Republic of Nigeria, has power to enact an arbitration law. More often than not, parties choose the AMA where they prefer the seat of the arbitration to be a territory or state in Nigeria. Conversely, parties choose the AL 2009 where they prefer the arbitration venue to be in Lagos State and the arbitration agreement does not expressly refer to the AMA or another arbitration law to govern the proceedings. Due to the wide applicability of the AMA to the various states and the Federal Capital Territory, the AL 2009 does not feature prominently in most arbitration agreements.
The AMA does not expressly distinguish between domestic and international arbitration. However, the AMA applies to the following types of arbitration where the seat of the arbitration is in Nigeria: international commercial arbitration, inter-state commercial arbitration, and commercial arbitration in Nigeria. The AMA applies to domestic and international arbitrations that designate a territory or state in Nigeria as the seat of arbitration.
The AMA substantially adopts the https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration (UNCITRAL Model Law) and largely incorporates the 2021 revisions.
Many of the innovative changes in the AMA reflect the UNCITRAL Model Law in respect of arbitration and mediation. In addition, section 91(10) of the AMA expressly provides that the UNCITRAL Model Law must be factored in when the AMA is interpreted, to foster uniformity of application and observance of good faith.
Mandatory Legislative Provisions
2. Are there any mandatory legislative provisions? What is their effect?
An arbitration agreement must be in writing (section 2, AMA).
An arbitration agreement is not invalid due to the death of a party to the arbitration. In this event, the arbitration agreement is enforceable by or against the personal representative of the deceased (section 4, AMA).
A court must stay proceedings commenced in breach of an arbitration agreement, unless the court determines that the agreement is void or incapable of being performed (section 5, AMA).
The mandate of an arbitrator terminates if the arbitrator withdraws from office, the parties agree to terminate the arbitrator's appointment because the arbitrator is unable to perform their functions, or for any reason the arbitrator fails to act without undue delay (section 10, AMA).
The parties must be treated equally and be given a full opportunity to present their case without unnecessary delay or expense (section 30, AMA).
The arbitrators can rule on questions of the arbitrators’ jurisdiction (section 14(1), AMA).
The parties are free to agree the procedure to be followed by the tribunal, subject to the AMA. If the parties have not agreed the procedure, the arbitral proceedings must follow the procedure in the Arbitration Rules in the First Schedule to the AMA (section 31(1), AMA).
An arbitration award must be in writing, dated, and signed by the arbitrators, and copies must be delivered to the parties. If there is more than one arbitrator, the signatures of a majority of the arbitrators will suffice. The award must also state the place of the arbitration (section 47, AMA).
3. Does the law prohibit any types of dispute from being resolved through arbitration?
There are no statutory provisions specifying matters that are not arbitrable but it is generally understood that the following are not arbitrable:
Matters relating to an indictment for an offence of a public nature.
Tax disputes. However, the Nigerian Court of Appeal has held that a tax-related claim is not necessarily a tax dispute (Esso v FIRS [2017] LPELR-51618(CA)). A claim is a tax dispute and therefore not arbitrable if it could:
adversely impact a tax authority's statutory discretionary powers to assess a taxpayer's tax liability;
prevent a taxpayer from paying an accurate amount of tax or tax assessed by the tax authority or subsequently determined on appeal by a tax tribunal or the Federal High Court; or
entitle a taxpayer to a tax refund not authorised by statute and without the tax authority determining that the taxpayer is eligible for the refund.
Disputes arising from an illegal contract, gaming, and wagering.
Disputes leading to a change of status, such as a divorce petition, bankruptcy proceedings, and winding-up of a company (Kano State Urban Development Board v Fanz Construction CO [1990] 4 NWLR (Pt 142) 1).
Disputes concerning a declaration of title to land. A dispute arising from a lease of property can be arbitrated, as it typically concerns an interpretation of contractual rights.
Actions for recovery of an admitted debt despite the existence of an arbitration agreement. A debt that has been admitted does not create a dispute that is arbitrable (Sakamori Construction (Nig.) Ltd v Lagos State Water Corporation (2022) 5 NWLR (Pt. 1822) 339).
Limitation
4. Does the law of limitation apply to arbitration proceedings?
The law of limitation applies to arbitration proceedings (section 34, AMA).
For example, for a dispute based on a breach of contract, the claimant must commence arbitration within five or six years from the date when the cause of action accrued, depending on the applicable limitation law (section 8, Limitation Law of Lagos State 2015 and section 16, Limitation Law of Cross Rivers State Chapter L14, Laws of Rivers State 2004).
There is no federal statute of limitation applicable across Nigeria. The Limitation of Actions Act 2004 (as amended) (a federal statute) only applies to the Federal Capital Territory, Abuja. However, various states have limitation laws applicable in their states.
Once arbitral proceedings are commenced, the limitation period stops running until the proceedings are concluded (Sifax (Nig.) Ltd. v. Migfo (Nig.) Ltd (2018) 9 NWLR (Pt. 1623) 13).
Arbitration Institutions
5. Which arbitration institutions are commonly used to resolve large commercial disputes?
In the authors’ experience, the most commonly used arbitration institutions to resolve large international commercial disputes seated in Nigeria or involving parties doing business in Nigeria are:
The International Chamber of Commerce (ICC) International Court of ArbitrationOpens in a new window.
The London Court of International ArbitrationOpens in a new window (LCIA).
The Regional Centre for International Commercial Arbitration, Lagos, NigeriaOpens in a new window (RCICAL).
The Kigali International Arbitration CentreOpens in a new window (KIAC).
The ICC International Court of Arbitration and the LCIA are commonly used to administer international arbitrations involving Nigerian parties.
It is not uncommon for the Chairman of the Chartered Institute of Arbitrators (CIArb) UK, Nigeria branch, to be designated as the authority to appoint the arbitrators in an ad hoc arbitration in Nigeria (especially if the parties cannot agree). Under the AMA, the default authority to appoint the arbitrators for international arbitration where the parties do not designate one is the Director of the RCICAL.
Jurisdictional Issues
6. What methods are available for a party to challenge the tribunal's jurisdiction? Does the tribunal or the local court determine issues of jurisdiction?
Section 14(1) of the AMA and section 19(1) of the AL 2009 recognise the kompetenz-kompetenz principle.
To challenge the jurisdiction of the tribunal on any ground, including that the tribunal does not have jurisdiction to hear the dispute, the party must raise the objection no later than the submission of the defence or as soon as the matter alleged to be beyond the scope of the tribunal’s jurisdiction is raised during the arbitral proceedings. (section 14(3) and (4), AMA).
The tribunal determines jurisdiction, but a party can request a court to review the tribunal’s decision on jurisdiction (section 14(6), AMA).
Arbitration Agreements
Validity Requirements
7. What are the requirements for an arbitration agreement to be valid and enforceable?
Substantive and Formal Requirements
Formal requirements. The arbitration agreement must be in writing, in any of the following forms:
A document signed by the parties.
An exchange of letters or any other means of communication (including electronic communication) that provides a record of the arbitration agreement.
An exchange of pleadings (points of claim and defence) in which the existence of an arbitration agreement is alleged by one party and not denied by the other.
(Section 2, AMA.)
Substantive requirements. In terms of substantive requirements, there must be a clear intention by the parties to arbitrate and the arbitration clause or agreement must define the scope of the dispute and the arbitral tribunal’s jurisdiction. The agreement must also state the seat and applicable procedural rules for the arbitration and the number of arbitrators and the procedure for their appointment. In addition, it is also advisable for the parties to state the law governing the arbitration clause or agreement and the language of the arbitration.
Separate Arbitration Agreement
The arbitration agreement can be an arbitration clause in a contract or in a separate agreement.
An arbitration clause incorporated by a reference (in a contract or a separate arbitration agreement) to a document containing an arbitration clause is an arbitration agreement, if the reference is made in a way that makes it part of the contract or the arbitration agreement and is signed by the parties to the arbitration (section 2(5), AMA and section 3(7), AL 2009).
Unilateral or Optional Clauses
8. Are unilateral or optional clauses enforceable?
Unilateral dispute resolution (including arbitration) clauses are, in principle, valid (United World Ltd v. MTS Limited [1998] 10 NWLR (Pt. 568) 106). If it is reasonably clear that the parties intended a dispute resolution clause to operate unilaterally, the courts are generally reluctant to interfere with the parties’ agreement (due to the principle of sanctity of contract).
The appellate courts have treated optional arbitration clauses (that is, arbitration clauses providing that the parties “may” refer their disputes to arbitration) as mandatory. The effect of this is that a party will not be permitted to ignore the arbitration clause and proceed to litigate the matter in court. (Sino-Afric Agriculture & Ind Company Ltd & Ors v. Ministry of Finance Incorporation & Anor (2013) LPELR-22370 (CA).)
Third Parties
9. Can a non-signatory to an arbitration agreement be joined to the arbitration proceedings?
An arbitral tribunal has power to allow an additional party to be joined to the arbitration if, on the face of it, the additional party is bound by the arbitration agreement (section 40(1), AMA). A party can be bound by an arbitration agreement without necessarily being a signatory to an arbitration agreement where, for example, the arbitration agreement is discernible from email exchanges (section 2, AMA).
Section 40(3) of the AL 2009 expressly recognises the joinder of a non-signatory to the arbitration proceedings with the consent of the parties to the arbitration.
A non-signatory to an arbitration agreement can be joined as a party if their agent acting on their behalf is a signatory to the arbitration agreement. The Court of Appeal has implicitly supported this agency theory (Mekwunye v. Lotus Capital Ltd & Ors (2018) LPELR-45546 (CA)).
A non-signatory can also be joined to the arbitration where the contract that includes the arbitration clause is assigned or novated with the parties’ consent.
10. Can a non-signatory compel a party to the arbitration agreement to arbitrate disputes under the arbitration agreement?
A non-signatory to an arbitration agreement cannot compel a party to the arbitration agreement to arbitrate disputes under the arbitration agreement, as there is no privity of contract for the non-signatory to do so.
If a non-signatory to an arbitration agreement is sued in litigation alongside two parties to an arbitration agreement, the non-signatory cannot apply to the court to stay proceedings pending arbitration (African Insurance Development Corporation v Nigeria LNG Ltd [2000] 4 NWLR (Pt. 653) 494).
Separability
11. Does the arbitration law recognise the separability of arbitration agreements?
Nigerian law recognises the separability of arbitration agreements and section 14(2) of the AMA and section 19(2) of the AL 2009 treat an arbitration agreement as separate to the other terms of the contract. An arbitral tribunal decision that the contract is null and void does not affect the validity of the arbitration clause.
If there is no express party agreement on the governing law for the arbitration agreement, the law governing the host contract will apply. If there is also no choice of governing law of the host contract, the arbitration agreement is governed by the law with which it is most closely connected to the contract or the law the arbitral tribunal determines to be appropriate (Article 43(1), Arbitration Rules).
Breach of Dispute Resolution Clause
12. What remedies are available where a party starts court proceedings in breach of an arbitration agreement or initiates arbitration in breach of a valid court jurisdiction clause?
Court Proceedings in Breach of an Arbitration Agreement
Where a dispute arising under an arbitration agreement is brought before a Nigerian court, a party can, no later than submitting its first statement on the substance of the dispute, file an application for a stay of the court proceedings pending arbitration (section 5(1), AMA and section 6, AL 2009).
The party must also show by documentary evidence attached to the application that they are willing and ready to submit to arbitration (and that the application is not a ruse or sham to deprive the respondent of their right of access to a court) (UBA Plc v. Trident Consulting Limited (2023) 14 NWLR (PT 1903) 95). Unless the court finds the arbitration agreement void, inoperative, or incapable of being performed, the court must stay further proceedings and refer the parties to arbitration.
The court will stay proceedings pending arbitration following an application by a party to the arbitration agreement. Where the court raises the issue by itself, it should invite the parties to address it and then take a decision.
Arbitration in Breach of a Valid Court Jurisdiction Clause
If arbitration is initiated in breach of a valid court jurisdiction clause, the respondent can challenge the arbitral tribunal’s jurisdiction on the ground that there is no arbitration agreement. The challenge is made to the tribunal by application (see Question 6). In practice, an arbitral tribunal is not likely to assume jurisdiction if there is no arbitration agreement signed by the parties, despite the provisions of section 2(3) and 2(4) of the AMA, which try to relax the requirement for a signed arbitration agreement
The tribunal can, in the absence of an arbitration agreement, declare that it has no jurisdiction to hear the dispute. The tribunal can also declare that it has no jurisdiction following determination of an application by a party challenging the tribunal’s jurisdiction.
13. Will the local courts grant an injunction to restrain proceedings started overseas in breach of an arbitration agreement?
Anti-suit injunctions to restrain the start or progress of a court action overseas in breach of an arbitration agreement have been granted by Nigerian courts but are rare. They can be made to protect arbitration proceedings in Nigeria and to stop foreign proceedings where the case is likely to cause imminent harm, prejudice the subject matter of the dispute, or jeopardise the arbitral process (Onward Enterprises Ltd v MV “Matrix” & Ors (2011) 5 CLRN 254; The owners of MV Lupex v Nigerian Overseas Chartering & Shipping Ltd (2003) 15 NWLR (pt. 844) 469).
Arbitrators
Qualifications and Characteristics
14. Are there any legal requirements relating to the qualifications and characteristics of arbitrators?
Qualifications
There are no legal requirements relating to an arbitrator's qualifications and an arbitrator does not need to be licensed to practise in Nigeria. The parties can provide for these requirements in their arbitration agreement.
Characteristics
There are no legal requirements relating to an arbitrator's characteristics and an arbitrator does not have to be a national of Nigeria. Unless the parties agree otherwise, no person is disqualified from being an arbitrator by reason only of nationality (section 7(1), AMA and section 8(3)(i), AL 2009). The parties can provide for these requirements in their arbitration agreement.
Independence and Impartiality
15. Are there any requirements relating to arbitrators' independence or impartiality?
As soon as a prospective arbitrator is approached in connection with a dispute that is the subject of an arbitration agreement, they must disclose any circumstances likely to give rise to any justifiable doubts about their impartiality or independence. This duty is a continuing obligation throughout the arbitral proceedings (sections 8(1) and (2) AMA and section 10(1) and (2), AL 2009).
Appointment and Removal
16. Does the law contain default provisions relating to the appointment and removal of arbitrators?
Appointment of Arbitrators
In the absence of an agreement between the parties on the number of arbitrators, a sole arbitrator must be appointed (section 6(2), AMA and section 7(3), AL 2009). If the parties are unable to agree on the appointment of a sole arbitrator within 30 days of a party receiving a written request for the dispute to be referred to arbitration from the other party, the arbitrator will be appointed, on request of a party, by the appointing authority designated by the parties or, failing such designation, by an arbitral institution in Nigeria or a local court (section 7(3)(b), AMA). Where no appointing authority is designated or agreed to be designated by the parties with respect to the appointment of a sole arbitrator, and the parties fail to agree on the arbitrator, the appointment will be made by the Lagos Court of Arbitration, on the application of any party to the Arbitration Agreement made within 30 days of the disagreement (section 8(4)b, AL 2009).
If there are three arbitrators, each party must appoint one arbitrator and the two appointed arbitrators will appoint the third arbitrator. A court will appoint the arbitrator(s) on the application of a party, if either:
- A party fails to appoint an arbitrator within 30 days of receipt of a request to do so by the other party.
- The two arbitrators fail to agree on the third arbitrator within 30 days of their appointment.
(Section 7(3)(a), AMA.)
If there is an agreed appointment procedure, a party can ask a court to appoint the arbitrators (unless the appointment procedure provides other ways to appoint) in any of the following circumstances:
- A party fails to act as required under the appointment procedure.
- The parties or two arbitrators are unable to agree under the appointment procedure.
- A third party, including an institution, fails to perform any duty imposed on it under the appointment procedure.
(Section 7(4), AMA.)
The AL 2009 contains similar provisions for appointment of three arbitrators. The Lagos Court of Arbitration is the default appointing authority (section 8(4)(a) and (c), AL 2009)
Removal of Arbitrators
The parties can agree to remove an arbitrator due to the arbitrator's inability to perform their functions (section 10(1), AMA). Otherwise, a party can challenge an arbitrator if it knows of circumstances likely to give rise to any justifiable doubts as to the arbitrator’s impartiality or independence. Unless otherwise agreed, a party who intends to challenge an arbitrator must, within 14 days of becoming aware of the setting up of the arbitral tribunal or any circumstances that may impair the tribunal’s independence or impartiality, send to the tribunal a written statement of the reasons for the challenge (section 9(2), AMA).
Under the AL 2009, a party can (on notice to the other parties, to the arbitrator concerned, and to any other arbitrators) apply to a court to remove an arbitrator on any of the following grounds:
- Circumstances give rise to justifiable doubts about the arbitrator's impartiality or independence.
- The arbitrator does not have the qualifications required by the arbitration agreement.
- The arbitrator is physically or mentally incapable of conducting the proceedings or there are justifiable doubts as to the arbitrator's capacity to do so.
- The arbitrator has refused or failed to use all reasonable dispatch in conducting the proceedings or making an award, and that substantial injustice has been or will be caused to the applicant.
If there is an arbitral or other institution or person authorised by the parties to remove an arbitrator, a court cannot exercise its power of removal unless satisfied that the applicant has first exhausted any available recourse to that institution or person (section 12, AL 2009).
Procedure
Commencement of Arbitral Proceedings
17. Does the law provide default rules governing the commencement of arbitral proceedings?
Unless otherwise agreed by the parties, the arbitral proceedings are deemed to commence on the date a request to refer the dispute to arbitration is received by the other party (section 33, AMA).
Applicable Rules and Powers
18. What procedural rules are arbitrators bound by? Can the parties determine the procedure that applies? Does the law provide any default rules governing procedure?
Applicable Procedural Rules
The parties are free to agree the procedure to be followed by the tribunal, subject to the AMA. If the parties have not agreed the procedure, the arbitral proceedings must follow the procedure in the Arbitration Rules in the First Schedule to the AMA (section 31(1), AMA), which includes the following rules:
- The arbitrators must treat the parties with equality and ensure that each party is given a full opportunity to present its case at any stage of the proceedings (Article 17(1), First Schedule, AMA).
- An award or decision must be made by a majority of the arbitral tribunal in a tribunal of three arbitrators (Article 41(1), First Schedule, Arbitration Rules).
- Costs must be fixed in the award (Article 48, First Schedule, Arbitration Rules).
- If the parties have not agreed the seat of the arbitration, the tribunal must determine the seat of arbitration with regard to the circumstances of the arbitration (Article 41(1), First Schedule, Arbitration Rules).
- The arbitral tribunal must determine the admissibility, relevance, materiality, and weight of the evidence offered (Article 28(5), First Schedule, Arbitration Rules).
Default Rules
See above, https://uk.practicallaw.thomsonreuters.com/1-542-4705?transitionType=Default&contextData=%28sc.Default%29#co_anchor_a654169
The Arbitration Rules in the First Schedule to the AMA also apply to international arbitrations that designate the Federal Capital Territory, Abuja or a state in Nigeria as the seat of arbitration.
Evidence and Disclosure of Documents
19. Are there any mandatory or default rules governing disclosure or production of evidence? Can the parties set the rules on disclosure of documents and production of evidence by agreement?
The parties can agree the procedure to be followed by the tribunal, including rules on disclosure and evidence (section 31(1), AMA) (see Question 18). However, Article 28(5) of the Arbitration Rules empowers the arbitral tribunal to determine the admissibility, relevance, materiality, and weight of any evidence. In addition, the arbitral tribunal must ensure that the parties are accorded equal treatment and that each party is given a full opportunity to present its case.
The Arbitration Rules do not contain exhaustive default provisions on the disclosure of documents. The tribunal can direct the parties to produce documents, exhibits, or other evidence including witness evidence within a time period determined by the tribunal (Article 28.2 and Article 28.4, Arbitration Rules). The tribunal cannot compel the parties to comply with the provisional timetable for the production of documents, exhibits, or other evidence. However, the tribunal can, at any time, after inviting the parties to express their views, extend or abridge the time for the provision of the parties’ evidence (section 66, AMA and Article 17 (2), Arbitration Rules).
A tribunal cannot compel witness attendance before an arbitral tribunal and only a court can do this (section 43(1), AMA) (see Question 22).
20. How, in practice, does the scope of disclosure in arbitrations compare with disclosure in domestic court litigation?
There is a general duty of disclosure in Nigerian court litigation. The general disclosure obligations in Nigeria court litigation require the parties to disclose all issues and facts in their pleadings and preclude the parties from relying on any evidence in support of facts or issues not raised in their pleadings.
The AMA does not specifically provide for discovery in arbitration. However, the Arbitration Rules provide that the tribunal can require the parties to produce documents, exhibits, or other evidence within such a period as the arbitral tribunal requires. In considering a party’s request for discovery, the arbitral tribunal must be mindful of the principles of equal treatment of the parties and of a fair hearing.
Disclosure is subject to the rules on privilege in the Evidence Act, 2011 (as amended), which provides that the following are privileged and cannot be produced in domestic court litigation:
- Communications during marriage.
- Judicial privilege.
- Unpublished official records relating to state affairs.
- Communications made to a public officer in official confidence and they consider that the public interest would suffer by disclosure of them.
- Professional communications between a client and their legal practitioner.
- Confidential communications with legal advisers.
- Statements in documents marked without prejudice.
That said, he Evidence Act does not apply to arbitration proceedings (section 256(1), Evidence Act). Disclosure in arbitration in Nigeria is generally based on the rules of evidence as chosen by the parties (see Question 19), including the relevance and admissibility of evidence, proof of evidence, oral and or documentary evidence, and so on.
In the authors’ experience, the scope of disclosure in arbitration is limited, as the arbitral tribunal will usually require some basis on which disclosure is requested, and will usually limit disclosure to specific and identified documents or a class of documents.
Confidentiality
21. Is arbitration confidential? If so, what is the scope of that confidentiality and who is subject to the obligation?
Both the AMA and AL 2009 are silent on confidentiality of the arbitration process but they have confidentiality provisions about an arbitral award:
- An award can only be made public with the consent of both parties (Article 42(5), Arbitration Rules).
- An award can be made public with the parties’ consent or where disclosure is required by a legal duty to protect or pursue a legal right, or in relation to legal proceedings before a court or other competent authority (Article 36(8), Lagos Court of Arbitration Rules 2018).
Hearings must be held in private unless the parties agree otherwise (Article 29.3, Arbitration Rules and Article 30.3, AL 2009). These provisions could arguably extend an implied duty of confidentiality to processes generated during the hearings but this interpretation does not appear to have been tested in the Nigerian courts.
There is an implied duty of confidentiality imposed on the parties although the AMA does not expressly state that arbitral proceedings are confidential, and there is no general law governing the confidentiality of arbitration proceedings in Nigeria. Based on party autonomy, the parties can elect to make the arbitral proceeding confidential. The parties can include the requirement for confidentiality in their arbitration agreement or in a separate/standalone agreement.
There is no generally defined scope of confidentiality. The parties are free to agree the specific aspects of the arbitration they wish to keep confidential, such as the arbitral award and documents disclosed during the proceeding.
An award can only be made public with the consent of the parties, or where disclosure is required of a party by a legal duty to protect or pursue a legal right, or in relation to legal proceedings before a court or other competent authority. As such, the parties, arbitrators, and arbitral institutions have a duty to uphold the confidentiality obligations agreed by the parties.
Courts and Arbitration
22. What are the court's powers to intervene to assist arbitration proceedings seated in their jurisdiction?
A local court can only intervene to assist arbitration proceedings seated in Nigeria in the situations set out in the AMA (section 64(1), AMA), including:
- To appoint arbitrators where a party fails to appoint an arbitrator or the two arbitrators appointed by the parties fail to appoint the third arbitrator (see Question 16).
- If a third party, including an institution, fails to perform any duty imposed on it under the procedure.
- To stay proceedings if a party commences litigation proceedings in breach of an arbitration agreement (see Question 12).
- To order attendance of factual witnesses and production of documents by a non-party on the application of a party that requires the witness and documents for its case. In that case, the court can compel the attendance before the arbitral tribunal of a witness who is in Nigeria (Article 28(4), Arbitration Rules and section 43(1), AMA) (see Question 19).
- To grant interim measures to support arbitration, such as an injunction or an attachment order.
- To enforce an interim measure ordered by the tribunal (see Question 25).
- Enforcement of final awards (section 57 of the AMA)
- Setting aside of an award (section 55 of the AMA.
The courts contemplated in the AMA for arbitration-related applications are the State High Courts, the High Court of the Federal Capital Territory, Abuja, and the Federal High Court. The AMA does not specify that the parties must have due regard to the underlying subject matter of the arbitration to determine which court to apply to. The Supreme Court has expressly held that any of the high courts may be approached for enforcement of final awards, irrespective of the underlying subject matter (NNPC v Fung Tai Eng Co Ltd (2023) 15 NWLR (Pt. 1906) 117). However, for other applications, it may be prudent to apply to a court that would ordinarily have jurisdiction over the subject matter of the arbitration.
23. In what circumstances might a local court interfere to frustrate an arbitration seated in its jurisdiction?
A local court can only intervene to assist arbitration proceedings in limited matters specified in the legislation (section 64(1), AMA) (see Question 22). This has been confirmed in several cases (including Statoil (Nig.) Ltd. v N.N.P.C (2013) 14 N.W.L.R (Pt.1373) 1 and Nigerian Agip Exploration Limited & Anor. v. N.N.P.C. & Anor. (2014) 6 C.L.R.N 150).
However, a Court of Appeal case shows the risk of court intervention beyond the grounds set out in a national arbitration law (Shell Petroleum Dev. Co. of Nig. Ltd. v. Crestar Integrated Natural Resources Ltd (2016) 9 N.W.L.R (Pt. 1517) 300). In that case, despite the fact that the national arbitration law at the time (that is, the Arbitration and Conciliation Act CAP A18 2004) provided limited grounds for court intervention, the Court of Appeal held that superior courts in Nigeria can grant injunctive orders restraining foreign arbitration proceedings in exceptional cases. In that case, Crestar challenged the validity and enforceability of the arbitration agreement upon which foreign arbitration proceedings had been initiated in London. Similarly, the High Court of the Federal Capital Territory in Suit No. FCT/HC/CV/079/2021 - Tempo Energy Nigeria Limited v. Aiteo Eastern E&P Company Limited & Ors. granted an anti-arbitration injunction against an ICC arbitration in London. On 8 July 2025, the court nullified the ICC arbitration, which had been commenced and conducted disregarding the earlier injunction by the court.
Insolvency
24. What is the effect on the arbitration of pending insolvency of one or more of the parties to the arbitration?
The authority of an arbitrator is not revoked by the insolvency or other change in circumstance of a party who appointed the arbitrator (section 4(2), AMA). However, arbitration proceedings are likely to be affected by insolvency proceedings against a party because Nigerian insolvency legislation (the Companies and Allied Matters Act, 2020 (as amended) and the Companies Winding-up Rules, 2001) provides that only the insolvency court can deal with a dispute relating to the insolvent company.
As such, leave of the insolvency court must be sought to continue or commence any action or proceeding against a company in respect of which winding-up proceedings and insolvency proceedings have commenced (section 580, Companies and Allied Matters Act 2020, as amended). The term action or proceeding implies that this provision also covers arbitration.
The insolvency court has discretion to grant or refuse leave to a claimant to commence or continue arbitration proceedings in the face of a winding-up action against the insolvent defendant and this is determined on a case-by-case basis. For example, if the court believes that the winding-up action is frivolous, it may stay or dismiss the winding-up action and direct the parties to proceed with their arbitration. If it believes there are genuine grounds to maintain the winding-up action, it is more likely to refuse leave and ask the claimant to submit its claims to the liquidator, particularly where the claim is monetary in nature.
Remedies
Interim Remedies
25. What interim remedies are available from the tribunal?
Interim Remedies
Unless excluded by the parties, the tribunal can issue an order:
- To maintain or restore the status quo pending determination of the dispute.
- To take action that may prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process.
- To provide a means of preserving assets out of which a subsequent award may be satisfied.
- To preserve evidence that may be relevant and material to the resolution of the dispute or preserve the subject matter of the arbitration.
- For a party to pay security for costs in connection with any interim measure order.
(Section 20(2), AMA.)
Without Notice Applications
Unless agreed by the parties, a party can request an interim measure from the tribunal without notice to the other party (section 22(1), AMA). The arbitral tribunal can grant the interim measure if it believes that prior disclosure will frustrate the purpose of the interim measure (section 22(2), AMA).
Security
The tribunal has power to award security for costs or the amount of the claim (section 52, AMA).
Final Remedies
26. What final remedies are available from the tribunal?
The AMA does not limit the type of final remedies an arbitration tribunal can award. In practice, arbitral tribunals award monetary compensation, injunctions, general and special damages, declaratory relief, specific performance, interest, and the costs of the arbitration (section 37 and 46, AMA).
Likewise, under the AL 2009, the tribunal can grant declaratory relief, monetary compensation, specific performance, injunctions, and interest (sections 38, 46, and 51, AL 2009).
Appeals
27. Can an arbitral award be appealed or challenged in the local courts? What are the grounds and procedure? Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises?
Rights of Appeal or Challenge
An arbitral award rendered in Nigeria can be set aside but not appealed.
Grounds and Procedure
Setting aside proceedings can be initiated before any state High Court, High Court of the Federal Capital Territory Abuja, or the Federal High Court within three months from the date of the award or an additional award (sections 91 and 55(4), AMA).
The applicant must file an application supported by an affidavit with a certified copy of the award and the respondent can file a counter-affidavit to oppose the application. At the hearing, the court relies on the affidavit evidence and written submissions already filed by the parties and gives its decision.
An arbitral award can be set aside on any of the following grounds:
- A party to the arbitration agreement was under a legal incapacity.
- The arbitration agreement is not valid under the law chosen by the parties or, failing such a choice, under the laws of Nigeria.
- The award deals with a dispute not contemplated by or does not fall within the terms of the arbitration.
- The award contains decisions on matters beyond the scope of the arbitration.
- The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the parties’ agreement.
- The subject matter of the dispute is otherwise not capable of settlement by arbitration under the laws of Nigeria.
- The award is against Nigerian public policy (section 55(3), AMA). The AMA does not define public policy.
A court can set aside an award in whole or part or uphold it entirely.
There are additional grounds set out in section 58(2) of the AMA where an applicant is challenging an award arising from international commercial arbitration, including:
Jurisdiction of the arbitral tribunal.
Setting aside or suspension of an award in the country in which or under the law of which the award was made.
The court does not decide on the merits of the award (even where the tribunal fails to perform its duties) and simply decides whether the applicant has established any grounds on which an award can be set aside (Statoil Nigeria Limited v Stardeep Water Petroleum Limited (2015) JELR 53341 (CA)).
The parties can opt for an award to be reviewed by a second tribunal (Award Review Tribunal), on application by the challenging party (AMA). The Award Review Tribunal will assess the application on the same grounds above for a court to set aside an award. The Award Review Tribunal can set aside the award in whole or part or uphold it entirely. The Arbitral Review Tribunal must decide within 60 days of it being set-up. If the Award Review Tribunal's decision is deemed unsupportable by a court on application by either or both parties, the court can reinstate an award that has been set aside. A court can only set aside an award upheld by the Award Review Tribunal on the grounds of non-arbitrability and public policy.
Waiving Rights of Appeal
Parties to a contract can, within the law, regulate their rights and liabilities under the principle of freedom of contract. However, an agreement waiving the right to challenge an award may be unenforceable as a breach of the constitutionally guaranteed right of a party to access a court. In practice, aggrieved/losing parties most often than not apply to set aside an arbitral award despite the inclusion of a waiver clause in the arbitration agreement.
28. What is the time limit to challenge or appeal an arbitration award rendered inside your jurisdiction?
In domestic arbitration, setting aside proceedings must be initiated within three months from the date of the award or an additional award (section 55(4), AMA).
The AMA does not impose a time limit to challenge an international arbitration award rendered in Nigeria. In practice, a successful party is likely to apply to enforce an international award if the losing party does not comply. In that case and depending on the jurisdiction in which enforcement is sought, this may trigger setting aside proceedings in Nigeria or an opposition to enforcement in the country where it is sought.
Costs
29. What legal fee structures can be used? Are fees fixed by law?
Fees are not fixed by law and are freely agreed by the parties and their lawyers. Legal fee structures can include hourly rates, fixed fees, or success fee or contingency fee arrangements.
The AMA recognises third party funding for arbitration, and provides that the torts of maintenance and champerty do not apply to third party funding of Nigerian seated arbitrations and arbitration-related proceedings in a Nigerian court (section 61, AMA).
There are no express restrictions on the types of third-party funding arrangements that can be put in place by the parties. The AMA only imposes a disclosure obligation on a party benefiting from a third-party funding agreement. Information about the funding agreement, such as the funder’s name and address, must be shared with all relevant parties, the arbitral tribunal, and, if applicable, the arbitral institution. This disclosure must be made at the outset of the arbitration, or if the funding agreement is executed after the arbitration has started, promptly after its execution.
In awarding costs, the arbitral tribunal takes into account the cost of obtaining third-party funding among other considerations including the provision of security, fees of the arbitral tribunal, and costs for legal representation.
The authors are not aware of any active professional third party funders in Nigeria for arbitration. In relation to litigation, third party funding is illegal, champertous, and contrary to public policy.
30. Are there any mandatory or default rules governing the allocation of costs?
Cost Allocation
Unless the parties agree otherwise (for example, that the parties will bear the arbitration costs equally), the costs of the arbitration (including legal costs) are in principle paid by the unsuccessful party. However, the AMA allows the tribunal some discretion to apportion costs between the parties if it determines that apportionment is reasonable in the circumstances of the case (Article 50(1), Arbitration Rules). The tribunal having regard to the circumstances of the case will award the legal costs to the successful or unsuccessful party, or to both parties (Article 50(2), Arbitration Rules).
The tribunal usually asks the parties to make a costs submission just before the award is made (after the final step in the arbitration proceedings). The tribunal considers the costs submission when determining the amount of costs to be awarded in favour or against a party.
Factors Considered
In exercising its discretion on costs, under section 50 of the AMA the tribunal can consider the following factors, among others:
- The costs paid by each party towards the tribunal’s fees.
- Travel and other expenses incurred by the arbitrators.
- The cost of expert advice and other assistance required by the arbitral tribunal.
- Travel and other expenses of witnesses approved by the tribunal.
- The costs of legal representation and assistance of the successful party, if they are claimed during the arbitral proceedings, to the extent the tribunal determines that the amount of these costs is reasonable (Article 48(2), Arbitration Rules).
The tribunal can also consider the parties’ conduct, because the tribunal has power to apportion costs between the parties if it determines that apportionment is reasonable, taking into account the circumstances of the case. These circumstances may include where the successful party caused a delay in the proceedings or had earlier refused an offer for settlement in a sum equal to or more than the amount awarded in the final award.
This article was originally published by Thomas Reuters Practical Law [Read the full publication here].
