Nigeria: Arbitration In Nigeria: An Exposé On Its Cost And Expenses

INTRODUCTION

In the light of increased awareness of the use of dispute resolution mechanisms in the resolution of disputes in Nigeria, arbitration has become the most commonly used alternative dispute resolution mechanism.

In 2021, major arbitration institutions published their statistical reports, and a close look, reveals that the use of arbitration increased by 25% in Nigeria compared to previous years. This shows increased participation in the process. One of the most asked questions for parties interested to use arbitration as a medium for dispute resolution is usually on the issue of cost and expenses in arbitration. In Africa, arbitration is presumed to be more expensive than litigation because to an extent the cost of litigation is subsumed by the state. This article critically assesses the cost and expenses of arbitration in Nigeria, eliciting from major arbitration institutions, and how these costs are incurred by parties.

THE COST OF ARBITRATION.

In simple vocabulary, cost is the amount of money required to be paid for something.¹ However, in legal terms, cost refers to the amount of money spent in pursuing a legal action, especially those expenses that the losing party may be required to pay.² The cost of arbitration includes the fees of arbitrators and the expenses reasonably incurred in connection with the arbitration as well as its administrative charges, which would be borne by the parties. The issue of cost is very crucial in arbitration as parties in dispute may not only bear their own cost but their counterparts' legal costs and other expenses.

There are two components of cost in arbitration, which includes;

• Arbitration costs: this includes the fees of the arbitrator(s), hiring the venue, transcribers, witnesses, administrative expenses.
• Legal cost: this involves fees for legal representation and those who assist in the preparation of the case and also the legal advice given to the parties.³

In ad-hoc arbitration, the arbitral tribunal fixes the cost and expenses of arbitration. However, where the arbitration is institutional i.e., under an arbitration institution that promotes and administers the arbitration process such as the International Chamber of Commerce, Nigeria (ICCN), Nigeria Chamber of Commerce Dispute Resolution Centre (NCC-DRC), Lagos Court of Arbitration (LCA), Regional Centre for International Commercial Arbitration Lagos (RCICAL) and Janada International Centre for Arbitration and Mediation (JICAM), etc. They fix the fees in accordance with the schedule of fees set down in their respective rules.

The method's used by arbitral institutions in fixing costs include;

1. Ad valorem: the fees are fixed proportionate to the amount in dispute.⁴
2. Per diem: the fees are fixed payable per day.⁵
3. Fixed fee: A fixed amount for all arbitration without regard to the amount in dispute of the period the arbitration may take to complete.⁶

LEGISLATIONS REGARDING COSTS IN ARBITRATION.

The principal legislation that governs arbitration in Nigeria is the Arbitration and Conciliation Act (ACA).⁷ Section 49 subsection 1 paragraph (a) to (e) of the Act makes provision concerning cost. It provides thus;

1. The arbitral tribunal shall fix costs of arbitration in its award and the term “cost” includes only:
2. The fees of the arbitral tribunal to be stated separately as to each arbitrator and to be fixed by the tribunal itself;
3. The travel and other expenses incurred by the arbitrators;
4. The cost of expert advice and of other assistance required by the arbitral tribunal;
5. The travel and other expenses of witnesses to the extent that such expenses are approved by the arbitral tribunal;
6. The costs for legal representation and assistance of the successful party if such costs were claimed during the arbitral proceedings, and only to the extent that the arbitral tribunal determines that the amount of such costs is reasonable.

Also the International Chamber of Commerce (ICC) Rules of Arbitration⁸ in Article 38, paragraph 1 states that:

“The cost of the arbitration shall include the fees and expenses of the arbitrator and the ICC administrative expenses fixed by the Court, in accordance with the scale in force at the time of the commencement of the arbitral proceedings, as well as the fees and expenses of any expert appointed by the Arbitral Tribunal and the reasonable legal and other costs incurred by the parties for the arbitration.”

The Lagos Court of Arbitration Rules⁹ as well in Article 42 stated in paragraph 1, that:

  “The term “cost” includes only:

• The fees of the Secretariat and the Arbitral Tribunal to be stated separately as to each arbitrator and to be fixed by the secretariat in accordance with the scale of fees in force at the time of commencement of the arbitration;
• The reasonable travel and other expenses incurred by the arbitrators;
• The reasonable cost of expert advice and of other assistance required by the arbitral tribunal; –
• The reasonable travel and other expenses of the witnesses to the extent that such expenses are approved by the Arbitral Tribunal;
• The legal and other cost incurred by the parties in relation to the arbitration to the extent that the Arbitral Tribunal determines that the amount of such cost is reasonable.”

The Regional Centre for International Commercial Arbitration (RCICAL) Arbitration Rules 2019¹⁰, Article 41 – 43 expressly discusses cost under the center. Article 41 states that:

“The Arbitral Tribunal, in consultation with the Director of the Centre, shall fix the costs of arbitration in its award. The term “costs” includes:

(a) The fees of the Arbitral Tribunal;

(b) The travel and other expenses incurred by the arbitrators;

(c) The costs of expert advice and of other assistance required by the Arbitral Tribunal;

(d) The travel and other expenses of witnesses to the extent such expenses are approved by the Arbitral Tribunal;

(e) The costs for legal representation and assistance of the successful party if such costs were claimed during the arbitral proceedings, and only to the extent that the Arbitral Tribunal determines that the amount of such costs is reasonable;

(f) Where the parties have designated an appointing authority other than the Centre, any fees and expenses of such appointing authority; in such circumstances, the fees shall be fixed by the Director of the Centre in consultation with the appointing authority;

(g) The expenses reasonably incurred by the Centre in connection with the arbitration, as well as the Registration Fee and the Centre's Administrative Charges. Any facilities made available by the Centre itself may be charged for on a comparable basis. All such expenses, fees and charges, and the costs of any facilities provided shall be fixed by the Director of the Centre.

Lastly, the Janada Centre for International Arbitration and Mediation provides under Article 47 (1) a-f of its Arbitration Rules, 2020¹¹ for cost that;

The term “costs” includes only:

a) The fees of the General Manager of the JICAM and the Arbitral tribunal to be stated separately as to each arbitrator and to be fixed by the tribunal itself in accordance with the scale of fees in force at the time of the commencement of the arbitration;

b) The reasonable travel and other expenses incurred by the arbitrators;

c) The reasonable cost of expert advice and of other assistance required by the Arbitral tribunal;

d) The reasonable travel and other expenses of witnesses to the extent that such expenses are approved by the Arbitral tribunal;

e) The legal and other costs incurred by the parties in relation to the arbitration to the extent that the Arbitral Tribunal determines that the amount of such costs is reasonable; and

f) Cost of third-party funding.

From the above provisions, it is evident that in the course of an arbitration proceeding, parties will be liable for the arbitrator's fees and expenses, the arbitration institution involved, and legal costs. In the case of Corona v. Amherst Partners¹², it was held that the demanded fees by the arbitral tribunal should be reasonable and not outrageous.

The fees of the arbitrator(s) depend on several factors, which include:

1. The complexity of the case,
2. The nature of the dispute,
3. Time and the expeditious conduct of the proceedings.¹³

As regards the fees of an arbitrator, there is a consensus to the fact that an arbitrator is at liberty to negotiate his fees or charges with his client when he is appointed. However, once an arbitrator is appointed the agreement of both parties to the arbitration is required before an arbitrator can negotiate his fees with a party. The rationale for this is that once appointed, an arbitrator puts on a quasi-judicial garment and hence precluded from any unilateral negotiation for his fees. Where however an arbitrator is appointed before agreement on his fees, he is nonetheless entitled to reasonable fees for his services.

Once an arbitral tribunal is established to hear a case, it may request each party to the proceedings to deposit an equal amount as an advance for the costs referred to in paragraphs (a), (b) and (c) of section 49 (1) of the Act¹⁴. Where the need arises during the course of the arbitral proceedings, the arbitral tribunal may request supplementary deposits from the parties.¹⁵ If the required deposits are not paid in full within thirty days after the receipt of the requests, the arbitral tribunal shall inform the parties so either of the parties may make the required payment; and if such payment is not made, the arbitral tribunal may order the suspension or termination of the arbitral proceedings¹⁶. After the award has been made, the arbitral tribunal shall render an account to the parties of the deposits received and return any unexpended balance to the parties¹⁷.

THE PRINCIPLE OF ‘COST SHOULD FOLLOW EVENTS'

This general principle connotes that the unsuccessful party bears the cost i.e., the cost of the arbitration proceedings shall be paid by the unsuccessful party to the successful party. Article 40 (1) & (2) of the ICC Rules of Arbitration upholds this principle.¹⁸ However, under the common law jurisdiction, the arbitral tribunal is at liberty to apportion the costs of the arbitration as they see fit. The arbitral tribunal having to its satisfaction considered the circumstances of the case will assign the legal cost either to the successful or unsuccessful party or both. The arbitral tribunal is given discretionary power in assigning arbitration and legal cost.

The practice of allocating costs and attorneys' fees between the parties to a dispute can be traced to Roman law, where the practice of requiring the losing party to pay the winning party's costs developed. Interestingly, in early ecclesiastical courts there were no fees for legal advice. However, under legis actio sacramentum, litigating parties deposited a sum of money in court to ensure legal proceedings were initiated with good cause. After the action, the deposit was refunded to the prevailing party, but the deposit of the losing party was forfeited to the temple.

In the case of Ladega v Akiyili¹⁹, the court was of the view that the objective of awarding cost is not to punish the unsuccessful litigant but to compensate the successful party for the expenses to which he has been put by having come to court. This position held by the court applies to arbitration. However, there are instances where the arbitrator may depart from applying this general principle of cost following the event. The arbitrator however uses his discretion in engaging in this crucial departure. In the case of Latoudis v Casey²⁰, Justice Dawson described the discretion as ‘unqualified', Justice McHugh J described it as ‘uncontrolled', and Chief Justice Mason described it as ‘unconfined'. Be that as it may be described, it has been held that such discretion must be exercised judicially.

The arbitrator usually considers a lot of issues and factors surrounding the arbitral proceedings before using his discretion to depart from the general rule that cost must follow the event. The arbitrator takes into consideration

1. Whether there was unreasonable delay or employing delaying tactics to frustrate the arbitral process, the arbitrators and the other party(s) in dispute, the arbitrator may not apply the cost following the event principle.²¹
2. Where the successful party has issues that tend to prolong the time span of the arbitration which was indeed not successfully contested, the arbitral tribunal can award cost against the successful party for such delay. In situations whereby the successful party was unsuccessful in a major issue that led to an increase in the cost of the arbitration, the arbitral tribunal can depart from the principle that cost follows the event.
3. The attitude of the parties in the course of the arbitral proceedings plays a significant role in whether the arbitrator will invoke his discretion in departing from the general principle. When it is discovered that the successful party had shown attributes of dishonesty or exhibited acts that are contrary to public morality and public policy in the management of the transaction that led to the arbitration, the arbitral tribunal may depart from the general principle.
4. Moreover, where it is mutually agreed in writing that the costs of the arbitration should be allocated on a certain method, the arbitrator can depart from the general rule on cost and honor the agreement between the parties.

THE JUXTAPOSITION OF COST IN ARBITRATION BETWEEN ARBITRATION INSTITUTIONS IN NIGERIA

INTERNATIONAL CHAMBER OF COMMERCE NIGERIA (ICCN)

Under the ICC, when the request for arbitration is received by the secretariat, each request to commence arbitration must be accompanied by a filing fee of US$ 5,000. Such payment is non-refundable and shall be credited to the claimant's portion of the advance on costs. Then, the arbitration will be submitted to the scales for an amount in dispute to be calculated by the cost calculator. It does not generate an estimate of the arbitrators' expenses (i.e. disbursements). The procedure the parties choose either, ordinary or expedited, and also the number of arbitrators will be considered during calculations. For the arbitrator's fee under the ad valorem system, the ICC Rules set a minimum and maximum amount. 

To calculate the ICC administrative expenses and the arbitrator's fees, the amounts calculated for each successive tranche of the amount in dispute must be added together, except that where the amount in dispute is over US$ 500 million, a flat amount of US$ 150,000 shall constitute the entirety of the ICC administrative expenses.²²

The tables below reveal arbitration costs based on ICC's Standard Scale.

Amount in Dispute Administrative Expenses*

(in US Dollars) (in US Dollars)

up to 50,000	5,000
from 50,001 to 100,000	5,000	+ 1.53% of amt. over 50,000
from 100,001 to 200,000	5,765	+ 2.72% of amt. over 100,000
from 200,001 to 500,000	8,485	+ 2.25% of amt. over 200,000
from 500,001 to 1,000,000	15,235	+ 1.62% of amt. over 500,000
from 1,000,001 to 2,000,000	23,335	+ 0.788% of amt. over 1,000,000
from 2,000,001 to 5,000,000	31,215	+ 0.46% of amt. over 2,000,000
from 5,000,001 to 10,000,000	45,015	+ 0.25% of amt. over 5,000,000
from 10,000,001 to 30,000,000	57,515	+ 0.10% of amt. over 10,000,000
from 30,000,001 to 50,000,000	77,515	+ 0.09% of amt. over 30,000,000
from 50,000,001 to 80,000,000	95,515	+ 0.01% of amt. over 50,000,000
from 80,000,001 to 500,000,000	98,515	+ 0.0123% of amt. over 80,000,000
over 500,000,000	150,000
* Amounts excluding VAT.

Amount in Dispute	B Arbitrator's Fees**
(in US Dollars)	(in US Dollars)
	Minimum		Maximum
up to 50,000	3,000		18.0200% of amount in dispute
from 50,001 to 100,000	3,000	+ 2.6500% of amt. over 50,000	9,010	+ 13.5680% of amt. over 50,000
from 100,001 to 200,000	4,325	+ 14310% of amt. over 100,000	15,794	+ 7.6850% of amt. over 100,000
from 200,001 to 500,000	5,756	+ 1.3670% of amt. over 200,000	23,479	+ 6.8370% of amt. over 200,000
from 500,001 to 1000,000	9,857	+ 0.9540% of amt. over 500,000	43,990	+ 4.0280% of amt. over 500,000
from 1,000,001 to 2,000,000	14,627	+ 0.6890% of amt. over 1,000,000	64,130	+ 3.6040% of amt. over 1,000,000
from 2,000,001 to 5,000,000	21,517	+ 0.3750% of amt. over 2,000,000	100,170	+ 1.3910% of amt. over 2,000,000
from 5,000,001 to 10,000,000	32,767	+ 0.1280% of amt. over 5,000,000	141,900	+ 0.9100% of amt. over 5,000,000
from 10,000,001 to 30,000,000	39,167	+ 0.0640% of amt. over 10,000,000	187,400	+ 0.2410% of amt. over 10,000,000
from 30,000,001 to 50,000,000	51,967	+ 0.0590% of amt. over 30,000,000	235,600	+ 0.2280% of amt. over 30,000,000
from 50,000,001 to 80,000,000	63,767	+ 0.0330% of amt. over 50,000,000	281,200	+ 0.1570% of amt. over 50,000,000
from 80,000,001 to 100,000,000	73,667	+ 0.0210% of amt. over 80,000,000	328,300	+ 0.1150% of amt. over 80,000,000
from 100,000,001 to 500,000,000	77,867	+ 0.0110% of amt. over 100,000,000	351,300	+ 0.0580% of amt. over 100,000,000
over 500,000,000	121,867	+ 0.0100% of amt. over 500,000,000	583,300	+ 0.0400% of amt. over 500,000,000

The result will provide an estimation of the advance on costs that may be fixed by the Court. Due to the rounding of figures, the estimate may vary slightly from the amount resulting from the application of the scales published in Appendix III to the ICC Rules of Arbitration. However, the Court is free to and regularly does, fix arbitrator's fees an amount higher or lower than the average. The estimation has no legal implications and should not be considered as necessarily reflecting the Court will fix in any given case.

NIGERIA CHAMBER OF COMMERCE DISPUTE RESOLUTION CENTRE (NCC-DRC)

Under the NCC-DRC Rules of 2019, cost and expenses in arbitration are calculated in administrative expenses on the amount in dispute, and the arbitrator's fees either on time (a daily rate of NGN 500,000 or an hourly rate of NGN 60,000) or ad valorem.

The tables below reveal the arbitration cost based on NCC-DRC's Standard Scale:

NCC-DRC SCALE OF STANDARD ADMINISTRATIVE FEES

Sum in Dispute (₦)	Fee Schedule (₦)
5M to 10M	100,000
10M to 20M	1% of sum in dispute
20M to 40M	200,000 +1.25% in excess of 20M
40M to 200M	450,000 + 0.80% in excess of 40M
200M to 400M	1,730,000 + 0.50% in excess of 200M
400M to 900M	2,730,000 + 0.20% in excess of 400M
900M to 2B	3,730,000 +0.05% in excess of 900M
More than 2B	4,350,000

NCC-DRC SCALE OF STANDARD ARBITRATORS FEES

Based on time – Rate per hour = ₦60,000

Rate per day = ₦ 500,000

 Based on Value

Amount in Dispute (₦)	Arbitrators Fees (₦)
Up to 17,500,00	Minimum 700,000	Maximum 15% of amount in Dispute
From 17,500,001 to 35,000,000	700,000 + 2% of amount over 17,500,000	2,625,000 + 10% of amount over 17,500,000
From 35,000,001 to 70,000,000	1,050,000 + 1% of amount over 35,000,000	4,375,000 +5% of amount over 35,000,000
From 70,000,0001 to 140,000,000	1,400,000 + 0.802% of amount over 70,000,000	6,125,000 + 4% of amount over 70,000,000
From 140,000,001 to 280,000,000	1,961,400 + 0.8200% of amount over 140,000,000	8,925,000 +3.4% of amount over 140,000,000
From 280,000,001 to 560,000,000	3,109,400 + 0.5% of amount over 280,000,000	13,685,000 + 3.2% of amount over 280,000,000
From 560,000,001 to 1,120,000,000	4,509,400 + 0.25% of amount over 560,000,000	22,645,000 + 1.2519% of amount over 560,000,000

From 1,120,000,001 to 2,240,000,000	5,909,400 + 0.1% of amount over 1,120,000,000	29,655,640 +0.8190% of amount over 1,120,000,000
From 2,240,000,001 to 4,480,000,000	7,029,400 + 0.0576% of amount over 2,240,000,000	38,828,440 + 0.2169% of amount over 2,240,000,000
From 4,480,000,001 to 8,960,000,000	8,319,640 +0.0531% of amount over 4,480,000,000	43,687,000 +0.2052% of amount over 4,480,000,000
From 8,960,000,001 to 17,920,000,000	10,698,520 + 0.0297% of amount over 8,960,000,000	52,879,960 +0.1413% of amount over 8,960,000,000
From 17,920,000,001 to 35,840,000,000	13,359,640 + 0.0189% of amount over 17,920,000,000	65,513,560 + 0.1035% of amount over 17,920,000,000
From 35,840,000,001 to 50,000,000,000	16,746,520 + 0.0090% of amount over 35,840,000,000	84,060,760 + 0.0522% of amount over 35,840,000,000
Over 50,000,000,000	20,294,680 + 0.0090% of amount over 50,000,000,000	102,769,240 + 0.360% of amount over 50,000,000,000

LAGOS COURT OF ARBITRATION

The Lagos Court Arbitration determines the exact fee by considering the arbitration's specific circumstances, such as complexity of the case, the arbitrator's experience, and the scheme under which a party initiates the arbitration (i.e, the Small Claims, Expedited and Standard). It calculates the administrative fees on the amount in dispute (ad valorem system) and the arbitrator's fee based on a daily rate or hourly rate.

The tables below reveals the arbitration cost based on LCA's Standard Scale:

LCA STANDARD ADMINISTRATIVE FEES

Sum in Dispute (₦)	Fee Schedule (₦)
5M to 10M	200,000
10M to 20M	2% of sum in dispute
20M to 40M	400,000 + 2.5% in excess of 20M
40M to 200M	900,000 + 1.1% in excess of 40M
200M to 400M	2,660,000 + 0.35% in excess of 200M
400M to 900M	3,360,000 + 0.2% in excess of 400M
900M to 2B	4,360,000 + 0.15% in excess of 900M
More than 2B	6,010,000

LCA EXPEDITED ADMINISTRATIVE FEES

Sum in Dispute (₦)	Fee Schedule (₦)
5M to 10M	100,000
10M to 20M	1% of sum in dispute
20M to 40M	200,000 + 1.25% in excess of 20M
40M to 200M	450,000 + 0.80% in excess of 40M
200M to 400M	1,730,000 + 0.50% in excess of 200M
400M to 900M	2, 730,000 + 0.20% in excess of 400M
900M to 2B	3, 730,000 + 0.05% in excess of 900M
More than 2B	4,350,000

LCA SMALL CLAIMS ADMINISTRATIVE FEES

Sum in Dispute (₦)	Fee Schedule (₦)
Below 500,000	25,000
500,000 to 1M	40,000
1M to 3M	60,000
3M to 5M	80,000

LCA STANDARD ARBITRATORS FEE

Based on Time – Rate per hour = ₦100,000

– Rate per day = ₦800,000

Based on Value

Amount in Dispute (₦)	Arbitrators Fees (₦)
Up to 17,500,000	Minimum  945,000	Maximum  16.2180% of amount in dispute
From 17,500,001 to 35,000,000	945,000 + 2.3850% of amount over 17,500,000	2,835,000 + 12.2112% of amount over 17,500,000
From 35,000,001 to 70,000,000	1,362,375 + 1.2879% of amount over 35,000,000	4,971,960 + 6.9165% of amount over 35,000,000
From 70,000,001 to 140,000,000	1,813,140 + 1.2303% of amount over 70,000,000	7,392,735 + 6.1533% of amount over 70,000,000
From 140,000,001 to 280,000,000	2,674,350 + 0.8586% of amount over 140,000,000	11,685,835 + 3.6252% of amount over 140,000,000
From 280,000,001 to 560,000,000	3,876,390 + 0.6201% of amount over 280,000,000	16,761,115 + 3.2436% of amount over 280,000,000
From 560,000,001 to 1, 120,000,000	5,612,670 + 0.3375% of amount over 560,000,000	25,843,195 + 1.2519% of amount over 560,000,000
From 1,120,000,001 to 2,240,000,000	7,502,670 + 0.1152% of amount over 1,120,000,000	34,349.595 + 0.8190% of amount over 1,120,000,000
From 2,240,000,001 to 4,480,000,000	8,792,910 + 0.0576% of amount over 2,240,000,000	43,522,395 + 0.2169% of amount over 2,240,000,000
From 4,480,000,001 to 8,960,000,000	10,083,150 + 0.0531% of amount over 4,480,000,000	48,380,955 + 0.2052% of amount over 4,480,000,000
From 8,960,000,001 to 17,920,000,000	12,462,030 + 0.0297% of amount over 8,960,000,000	57,573,915 + 0.1413% of amount over 8,960,000,000
From 17,920,000,001 to 35,840,000,000	15,123,150 + 0.0189% of amount over 17,920,000,000	70,234,395 + 0.1035% of amount over 17,920,000,000
From 35,840,000,001 to 50,000,000,000	18,510,030 + 0.0099% of amount over 35,840,000,000	88,781,595 + 0.0522% of amount over 35,840,000,000
Over 50,000,000,000	22,058,190 + 0.0090% of amount over 50,000,000,000	107, 490, 075 + 0.0360% of amount over 50,000,000,000

LCA SMALL CLAIMS ARBITRATORS FEE

Sum in Dispute (₦)	Arbitrators Fees (₦)
Below 500,000	80,000
500,000 to 1M	80,000 + 5% of amount in excess of 500,000
1M to 3M	130,000 + 3.5% in excess of 1M
3M to 5M	235,000 + 2% in excess of 3 M

LCA EXPEDITED ARBITRATORS FEE

Based on Time – Rate per hour = ₦ 60,000

– Rate per day = ₦ 500,000

BASED ON VALUE

Amount in Dispute (₦)	Arbitrators Fees (₦)
Up to 17,500,000	Minimum 700,000	Maximum 15% of amount in dispute
From 17,500,001 to 35,000,000	700,000 + 2% of amount over 17,500,000	2,625,000 + 10% of amount over 17,500,000
From 35,000,001 to 70,000,000	1,050,000 + 1% of amount over 35,000,000	4,375,000 + 5% of amount over 35,000,000
From 70,000,001 to 140,000,000	1,400,000 + 0.802% of amount over 70,000,000	6,125,000 + 4% of amount over 70,000,000
From 140,000,001 to 280,000,000	1,961,400 + 0.8200% of amount over 140,000,000	8,925,000 + 3.4% of amount over 140,000,000
From 280,000,001 to 560,000,000	3,109,400 + 0.5% of amount over 280,000,000	13,685,000 + 3.2% of amount over 280,000,000
From 560,000,001 to 1, 120,000,000	4,509,400 + 0.25% of amount over 560,000,000	22,645,000 + 1.2519% of amount over 560,000,000
From 1,120,000,001 to 2,240,000,000	5,909,400 + 0.1% of amount over 1,120,000,000	29,655,640 + 0.8190% of amount over 1,120,000,000
From 2,240,000,001 to 4,480,000,000	7,029,400 + 0.0576% of amount over 2,240,000,000	38,828,440 + 0.2169% of amount over 2,240,000,000
From 4,480,000,001 to 8,960,000,000	8,319,640 + 0.0531% of amount over 4,480,000,000	43,687,000 + 0.2052% of amount over 4,480,000,000
From 8,960,000,001 to 17,920,000,000	10,698,520 + 0.0297% of amount over 8,960,000,000	52,879,960 + 0.1413% of amount over 8,960,000,000
From 17,920,000,001 to 35,840,000,000	13,359,640 + 0.0189% of amount over 17,920,000,000	65,513,560 + 0.1035% of amount over 17,920,000,000
From 35,840,000,001 to 50,000,000,000	16,746,520 + 0.0099% of amount over 35,840,000,000	84,060,760 + 0.0522% of amount over 35,840,000,000
Over 50,000,000,000	20,294,680 + 0.0090% of amount over 50,000,000,000	102, 769,240+ 0.0360% of amount over 50,000,000,000

REGIONAL CENTRE FOR INTERNATIONAL COMMERCIAL ARBITRATION LAGOS (RCICAL)

The Centre calculates the arbitrator's fees and administrative charges using the ad valorem  system. Unlike the LCA, RCICAL appears to use separate scales for sole arbitrators and tribunals involving multiple arbitrators. The Rules set minimum and maximum fees in this regard. RCICAL's administrative charges consist of a registration fee (USD 750) and ad valorem Secretariat fees. RCICAL designates its fees and costs in USD. Parties may presumably make NGN payments at the relevant CBN at the payment date.

The tables below reveal the arbitration cost based on RCICAL's Standard Scale:

ADMINISTRATIVE CHARGES (USD)

Amount in dispute (USD)		Fee (USD)
1	Up to 150,000	3% with a minimum of 1,500
2	From 150,001 up to 300,000	4,500 + 2% in excess of 150,000
3	From 300,001 up to 1,500,000	7,500 + 1% in excess of 300,000
4	From 1,500,001 up to 3,000,000	19,500 + 0.30% in excess of 1,500,000
5	From 3,000,001 up to 6,000,000	24,500 + 0.20 in excess of 3,000,000
6	From 6,000,001 up to 15,000,000	30,000 + 0.15% in excess of 6,000,000
7	More than 15,000,000	43,500 + 0.10% in excess of 15,000,000

ARBITRATOR'S SCHEDULE OF FEE'S FOR A SOLE ARBITRATOR

Amount in dispute (USD)		Minimum	Maximum
1	Up to 150,000	$3,000	7.00%
2	From 150,001 up to 300,000	1.00%	4.00%
3	From 300,001 up to 1,500,000	0.50%	2.00%
4	From 1,500,001 up to 3,000,000	0.40%	1.00%
5	From 3,000,001 up to 6,000,000	0.30%	0.80%
6	From 6,000,001 up to 15,000,000	0.20%	0.50%
7	From 15,000,001 up to 30,000,000	0.10%	0.30%
8	From 30,000,001 up to 150,000,000	0.05%	0.15%
9	From 150,000,001 up to 300,000,000	0.02%	0.08%
10	Over 300,000,000	0.01%	0.05%

JANADA CENTRE FOR INTERNATIONAL ARBITRATION AND MEDIATION (JICAM)

Under its arbitration rules, the arbitrator's fees and administrative charges depend on the amount in dispute. The arbitrator may also base his or her fees on time (a daily rate of USD 2000 for the hearing and an hourly rate of USD 250 for preliminary matters). Where there is a tribunal involving three members, the arbitrator's fee is multiplied by three.

The tables below reveal the arbitration cost based on JICAM's Standard Scale:

JICAM STANDARD ADMINISTRATIVE FEES

Sum in Dispute (₦)	Fee Schedule (₦)
5M to 10M	200,000
10M to 20M	2% of sum in dispute
20M to 40M	400,000 + 2.5% in excess of 20M
40M to 200M	900,000 + 1.1% in excess of 40M
200M to 400M	2,660,000 + 0.35% in excess of 200M
400M to 900M	3,360,000 + 0.2% in excess of 400M
900M to 2B	4,360,000 + 0.15% in excess of 900M
More than 2B	6,010,000

JICAM EXPEDITED ADMINISTRATIVE FEES

Sum in Dispute (₦)	Fee Schedule (₦)
Below 500,000	25,000
500,000 to 1M	40,000
1M to 3M	60,000
3M to 5M	80,000
200M to 400M	2,660,000+0.35% in excess of 200M
400M to 900M	3,360,000+0.20% in excess of 400M
900M to 2B	33,730,000+0.5% in excess of 900M

JICAM STANDARD ARBITRATOR FEES

Amount in Dispute (₦)	Arbitrators Fees (₦)
Up to 17,500,000	Minimum  945,000	Maximum  16.2180% of amount in dispute
From 17,500,001 to 35,000,000	945,000 + 2.3850% of amount over 17,500,000	2,835,000 + 12.2112% of amount over 17,500,000
From 35,000,001 to 70,000,000	1,362,375 + 1.2879% of amount over 35,000,000	4,971,960 + 6.9165% of amount over 35,000,000
From 70,000,001 to 140,000,000	1,813,140 + 1.2303% of amount over 70,000,000	7,392,735 + 6.1533% of amount over 70,000,000
From 140,000,001 to 280,000,000	2,674,350 + 0.8586% of amount over 140,000,000	11,685,835 + 3.6252% of amount over 140,000,000
From 280,000,001 to 560,000,000	3,876,390 + 0.6201% of amount over 280,000,000	16,761,115 + 3.2436% of amount over 280,000,000
From 560,000,001 to 1, 120,000,000	5,612,670 + 0.3375% of amount over 560,000,000	25,843,195 + 1.2519% of amount over 560,000,000
From 1,120,000,001 to 2,240,000,000	7,502,670 + 0.1152% of amount over 1,120,000,000	34,349.595 + 0.8190% of amount over 1,120,000,000
From 2,240,000,001 to 4,480,000,000	8,792,910 + 0.0576% of amount over 2,240,000,000	43,522,395 + 0.2169% of amount over 2,240,000,000
From 4,480,000,001 to 8,960,000,000	10,083,150 + 0.0531% of amount over 4,480,000,000	48,380,955 + 0.2052% of amount over 4,480,000,000
From 8,960,000,001 to 17,920,000,000	12,462,030 + 0.0297% of amount over 8,960,000,000	57,573,915 + 0.1413% of amount over 8,960,000,000
From 17,920,000,001 to 35,840,000,000	15,123,150 + 0.0189% of amount over 17,920,000,000	70,234,395 + 0.1035% of amount over 17,920,000,000
From 35,840,000,001 to 50,000,000,000	18,510,030 + 0.0099% of amount over 35,840,000,000	88,781,595 + 0.0522% of amount over 35,840,000,000
Over 50,000,000,000	22,058,190 + 0.0090% of amount over 50,000,000,000	107, 490, 075 + 0.0360% of amount over 50,000,000,000

JICAM EXPEDITED ARBITRATORS FEE

Based on Time – Rate per hour = ₦60,000

– Rate per day = ₦500,000

Based on Value

Amount in Dispute (₦)	Arbitrators Fees (₦)
Up to 17,500,000	Minimum 700,000	Maximum 15% of amount in dispute
From 17,500,001 to 35,000,000	700,000 + 2% of amount over 17,500,000	2,625,000 + 10% of amount over 17,500,000
From 35,000,001 to 70,000,000	1,050,000 + 1% of amount over 35,000,000	4,375,000 + 5% of amount over 35,000,000
From 70,000,001 to 140,000,000	1,400,000 + 0.802% of amount over 70,000,000	6,125,000 + 4% of amount over 70,000,000
From 140,000,001 to 280,000,000	1,961,400 + 0.8200% of amount over 140,000,000	8,925,000 + 3.4% of amount over 140,000,000
From 280,000,001 to 560,000,000	3,109,400 + 0.5% of amount over 280,000,000	13,685,000 + 3.2% of amount over 280,000,000
From 560,000,001 to 1, 120,000,000	4,509,400 + 0.25% of amount over 560,000,000	22,645,000 + 1.2519% of amount over 560,000,000
From 1,120,000,001 to 2,240,000,000	5,909,400 + 0.1% of amount over 1,120,000,000	29,655,640 + 0.8190% of amount over 1,120,000,000
From 2,240,000,001 to 4,480,000,000	7,029,400 + 0.0576% of amount over 2,240,000,000	38,828,440 + 0.2169% of amount over 2,240,000,000
From 4,480,000,001 to 8,960,000,000	8,319,640 + 0.0531% of amount over 4,480,000,000	43,687,000 + 0.2052% of amount over 4,480,000,000
From 8,960,000,001 to 17,920,000,000	10,698,520 + 0.0297% of amount over 8,960,000,000	52,879,960 + 0.1413% of amount over 8,960,000,000
From 17,920,000,001 to 35,840,000,000	13,359,640 + 0.0189% of amount over 17,920,000,000	65,513,560 + 0.1035% of amount over 17,920,000,000
From 35,840,000,001 to 50,000,000,000	16,746,520 + 0.0099% of amount over 35,840,000,000	84,060,760 + 0.0522% of amount over 35,840,000,000
Over 50,000,000,000	20,294,680 + 0.0090% of amount over 50,000,000,000	102, 769,240+ 0.0360% of amount over 50,000,000,000

JICAM SMALL CLAIMS ARBITRATORS FEE

Sum in Dispute (₦)	Arbitrators Fees (₦)
Below 500,000	80,000
500,000 to 1M	80,000 + 5% of amount in excess of 500,000
1M to 3M	130,000 + 3.5% in excess of 1M
3M to 5M	235,000 + 2% in excess of 3 M

In conclusion, it is established that in the course of arbitration proceedings costs are incurred whether administrative or the arbitrators' fee. Costs are mostly incurred because of the decision of the parties on whether to contest the issue between them or not, the amount of the dispute in question and how many arbitrators the parties want. There appears to be several similarities in fees from arbitral institutions in Nigeria and when a party decides to contest their issue, they should first set out a budget for the arbitration while considering the best arbitral institution for the dispute. Parties must also ask the question “do the benefits of that particular arbitration institution outweigh its costs?” If that can be answered, then parties can proceed to arbitration.

Footnotes

1 Encarta Dictionaries

2 Ibid

3 Gotanda J.Y. (1999): Awarding Costs and Attorneys' Fees in International Commercial Arbitrations, Michigan Journal of International Law Vol. 21 No. 1, 1999

4 Ephraim Akpata (1997): The Nigerian Arbitration Law in Focus, Lagos: West African Book Publishers Limited.

5 Ibid.

6 Ibid.

7 CAP A18 Laws of the Federal Republic of Nigeria (LFN) 2004.

8 ICC Rules of Arbitration  http://www.iccwbo.org/products-and-services/arbitration-and-adr/arbitration/icc-rulesof-arbitration/ accessed January 3^rd, 2022.

9 LCA Arbitration Rules (Amended) 2018  https://www.lca.org.ng/wp-content/uploads/2018/07/AMENDED-LCA-RULES-ilovepdf-compressed.pdf Accessed February 25th, 2022.

10 RCICAL Arbitration Rules 2019 https://rcical.org/index.php/arbitration-rules/ Accessed on February 25^th, 2022.

11 JICAM Arbitration Rules 2020 http://www.jicam.org/index.php/rules-law/arbitration-rules Accessed on January 3rd, 2022.

12 No. D040084 Cal. 4th App. Dist. April 1, 2003.

13 Article 49 (2) of the Arbitration and Conciliation Act, CAP A18 Laws of the Federal Republic of Nigeria (LFN) 2004, First schedule.

14 Section 50(1) of the Arbitration and Conciliation Act, CAP A18 Laws of the Federal Republic of Nigeria (LFN) 2004.

15 Section 50(2) of the Arbitration and Conciliation Act, CAP A18 Laws of the Federal Republic of Nigeria (LFN) 2004.

16 Section 50(4) of the Arbitration and Conciliation Act, CAP A18 Laws of the Federal Republic of Nigeria (LFN) 2004.

17 Section 50(5) of the Arbitration and Conciliation Act, CAP A18 Laws of the Federal Republic of Nigeria (LFN) 2004.

18 Identical with Article 38 and 40 of the United Nations Commission on International Trade Law (UNCITRAL), Arbitration Rules 1976.

19 (1975) 2 S.C. 91.

20 (1990) 170 CLR 534.

21 Westland Helicopters Limited v. Arab Organization for Industrialization 80 ILR (1987-10-23).

22 Article 2, Appendix III 2021 ICC Arbitration Rules

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.