Introduction
The National Policy on Arbitration and Alternative Dispute Resolution 2024 (the "Policy") represents a landmark development in Nigeria's legal framework. Developed by a committee chaired by Dr. Olisa Agbakoba, SAN, approved by the Federal Executive Council (FEC) in July 2024, and formally unveiled on February 11, 2025, the Policy aims to position Nigeria as a leading hub for arbitration and alternative dispute resolution ("ADR") in Africa. The Policy (a) seeks to foster efficient, transparent, and globally aligned mechanisms for resolving cross-border commercial disputes and (b) adopts a more proactive and efficient approach to managing international disputes in view of Nigeria's recent challenges with both commercial and investment arbitrations
While the effectiveness of arbitration and ADR generally in Nigeria largely depend on the growth of the economy and the reputation of the courts, the Policy nonetheless serves a complementary role by providing a structured framework for their promotion, particularly in commercial contexts involving international parties, as part of Nigeria's broader aspirations in regional and global trade.
This article offers a critical appraisal of the Policy. It examines (a) its implications for international businesses (particularly cross-border disputes), (b) how it may reshape Nigeria's position on the global arbitration landscape, and (c) challenges and potential hurdles that may hinder its implementation.
Key Objectives of the Policy
The Policy outlines several important objectives aimed at promoting Nigeria's standing as a preferred destination for dispute resolution. The following are some of the key objectives of the Policy:
a. Promotion of ADR Mechanisms: The Policy emphasizes the importance of promoting arbitration, mediation, and conciliation as effective dispute resolution methods.1 It also seeks to increase the adoption of these mechanisms across both public and private sectors, making them the preferred methods of resolving disputes, especially in commercial transactions. This focus on ADR provides a more efficient, less adversarial, and cost-effective means of resolving disputes compared to traditional litigation.
b. Government Participation and Institutional Support: The Policy also stresses that the Nigerian Ministries, Departments, and Agencies (MDAs) should adopt structured measures for negotiating ADR agreements, and for participating effectively in arbitral proceedings. 2 This forms part of a broader objective to establish a coordinated national approach and address the inefficiencies associated with the current unstructured processes. Essentially, institutions such as the Lagos Court of Arbitration (the "LCA") will play a pivotal role in ensuring that these methods are accessible and effectively implemented. Their role extends beyond merely providing venues for arbitration or mediation; they act as critical enablers of accessibility, efficiency, and credibility in ADR processes. By offering administrative support, case management services, and established procedural frameworks, institutions like the LCA make it easier for MDAs and other parties to engage with ADR mechanisms effectively. Additionally, through capacity-building initiatives such as training and public education, these institutions strengthen institutional trust and expertise. In doing so, they bridge the gap between the Policy's goals and their practical, lasting application.
c. Compliance with International Standards: Another key objective of the Policy is to establish a framework for the continuous review and modernization of Nigerian arbitration laws to ensure full conformity with the fundamental principles of international arbitration. This is to align Nigerian arbitration practices with globally-recognized frameworks, such as the UNCITRAL Model Law, the New York Convention, ICC Arbitration Rules, and the ICSID Convention. 3 This is crucial for attracting foreign investment into Nigeria4 and ensuring that Nigerian arbitral awards are easily recognized and enforceable outside Nigeria. This is particularly important for crossborder commercial disputes where parties require confidence in the ability to enforce arbitral outcomes internationally5
A Critique of the Innovation in the Policy
The Policy outlines several innovations aimed at enhancing the effectiveness and efficiency of arbitration and ADR in Nigeria. Some of these innovations include, first, the need for the adoption of certain minimum standards in arbitration practices and procedures to promote consistency, fairness, and international best practice.6 This includes the provision of model arbitration clauses and the establishment of clear procedural guidelines for resolving disputes for use by Federal and State Ministries, Departments, and Agencies (MDAs) and their counterparties7 (without legislating for the States). Importantly, the Policy affirms that MDAs and their counterparties remain at liberty to agree on any arbitration rules to govern their disputes, with the model clause offered solely to promote uniformity where no such agreement exists. The model clause is a detailed but simple multitiered dispute resolution provision that provides a three-step approach to resolving disputes involving Nigerian parties starting with negotiations, followed by mediation, which may be conducted virtually, and then arbitration as a last resort. It also allows for settlement negotiations and requests for interim or emergency reliefs while arbitration proceedings are ongoing. By recommending these practices, the policy seeks to ensure consistency in arbitration proceedings, offering both local and international businesses a more predictable and transparent dispute resolution process.
Second, the Policy provides that in arbitral proceedings involving Federal or State MDAs, any arbitrator to be appointed by the MDAs must be a suitably-qualified and competent Nigerian arbitrator. However, the Policy does not define what constitutes "suitably qualified and competent," leaving room for ambiguity, particularly in cases where prospective appointees, such as Judicial Service Commission staff (JSCS), possess adjudicatory experience but may not have undergone formal arbitration training or certification. The Policy also states that in international commercial arbitration involving Federal or State MDAs, the Attorney-General of the Federation ("AGF") or States Attorneys-General, who may also invite the Director of Lagos Regional Centre for International Commercial Arbitration ("RCICAL") or other recognized centers, will appoint qualified Nigerian arbitrator(s) for the MDA. While the involvement of such centres may be intended to bolster professionalism and standardization, it raises concerns about limiting party autonomy and the unnecessary institutionalization of appointments, contrary to the principle of freedom in arbitral proceedings. Furthermore, where a sole arbitrator is to be appointed, such arbitrator must also be a suitably-qualified and competent Nigerian.
If the parties fail to agree on the appointment procedure or on the appointing authority, AGF or State AG may request RCICAL or any other recognized arbitral centre to make the appointment. For disputes exceeding threshold claims with Fifty Million Naira (N50,000,000), approval from the AGF is required, however, for claims lower than the Fifty Million Naira (N50,000,000) threshold, the parties may appoint without recourse to the AGF.8 It is, however, important that the Policy takes inflation into consideration in determining this monetary threshold, as the Policy does not indicate whether it will be reviewed or adjusted over time. Without such adjustment, the threshold may quickly lose its relevance in the light of Nigeria's volatile economic conditions, potentially drawing lower-value disputes into a framework meant for more substantial claims.
Third, with respect to legal representation, the Policy outlines clear criteria for selecting Nigerian counsel, placing emphasis on technical skill, expertise, and transparency in selection. However, it does not specify measurable benchmarks or objective indicators for these criteria. Where foreign counsel is engaged due to their specific experience, the Policy mandates that Nigerian counsel must be informed and involved in the process.9 It also allows Nigerian counsel to recommend foreign counsel to the AGF or State Attorney-General for consideration.
Fourth, while the Policy encourages the development of a unified code of conduct for arbitration and ADR practitioners, ensures enforcement, as well as capacity-building initiatives for MDA personnel involved in contract negotiation and dispute resolution,10 it does not explain why Nigeria cannot, in the interim, adopt widely accepted frameworks such as the International Bar Association Guidelines on Conflicts of Interest, which already provide detailed standards and enjoy global recognition.
Furthermore, the Policy is silent on who will be responsible for enforcing the proposed code and administering discipline in cases of breach. It also fails to consider how such a code would apply to non-lawyer arbitrators, who often serve in commercial disputes. Without clarity on these points, the proposed code risks being aspirational rather than practically enforceable. The Policy also provides that in implementing these initiatives, collaboration with private sector stakeholders is expressly encouraged to support awareness and long-term policy sustainability.
A centralized and coordinated approach is also emphasized for the oversight of government contract negotiations and investment disputes involving MDAs.11 This is designed to ensure that lessons learned are integrated into future investment agreements. To support this framework, the Policy provides for the maintenance of national registers documenting commercial and investment proceedings12 and establishes a repository for Nigeria's Bilateral Investment Treaties (BITs),13 thereby enhancing the country's ability to safeguard its economic and legal interests. This raises several questions. First, it does not specify which body is responsible for maintaining these registers, whether the Federal Ministry of Justice ("FMOJ") or another agency. If the FMOJ is intended to take on this role, then the Policy should explicitly refer to the creation and administration of a BIT registry. More fundamentally, however, the idea of maintaining a register of arbitration proceedings is at odds with the private and confidential nature of arbitration. Without clear safeguards or justification, such a register risks undermining the confidentiality that is often central to the choice of arbitration itself, thereby deterring parties from submitting disputes to Nigeria-seated arbitration.
Fifth, to position Nigeria as a leading arbitration hub, the Policy actively promotes the selection of Nigeria as the seat and venue for arbitration by both government and private entities in resolving disputes. At the same time, the Policy recognizes that certain challenges within the Nigerian arbitration landscape currently hinder the country's appeal as a preferred seat or venue for arbitration, while affirming ongoing efforts to address and reform these issues.
Sixth, the Policy emphasizes the importance of collaboration between the Nigerian government and the private sector.14 The aim is for businesses, particularly international corporations, to be encouraged to engage with ADR practices by incorporating ADR as a means of dispute resolution in their contracts. The assumption that such engagement will reinforce Nigeria's position as a preferred arbitration venue overlooks the more decisive factors that shape the preferences of foreign investors. Even if Nigeria's courts enjoyed a strong reputation, for neutrality and efficiency, many international parties would still opt for arbitration in politically and economically neutral jurisdictions. The Policy overestimates the persuasive power of standardized arbitration rules and government-endorsed frameworks in attracting cross-border disputes to Nigeria. Without addressing core concerns such as judicial interference, enforcement reliability, and geopolitical neutrality, the vision of Nigeria emerging as a regional arbitration hub risks remaining aspirational rather than nearly attainable.
Implications for Cross-Border Commercial Disputes
The Policy will have significant implications for international commercial disputes. By seeking to address key aspects such as institutional capacity, enforcement of awards, and alignment with international standards, the Policy aims to create a more favorable environment for resolving crossborder disputes. One of the primary goals of the Policy is to position Nigeria as a leading jurisdiction for international arbitration. However, while the Policy emphasizes aligning enforcement mechanisms with instruments like the New York Convention, Nigeria is already a signatory to both the New York and ICSID Conventions and has incorporated their key principles into domestic law through the Arbitration and Mediation Act 2023. The more pressing issue lies not in formal alignment but in the consistent and predictable application of these standards by Nigerian courts.
Also, by promoting the appointment of competent local counsel and arbitrators, and enabling structured collaboration with foreign legal experts, the Policy ensures that disputes involving Nigerian parties can be handled with both global best practices and local expertise which could improve confidence in Nigeria's arbitration framework. This dual capacity is increasingly important in international commerce, where parties value both local insight and global competence. To the extent that the Policy improves transparency in appointment practices and fosters professional standards, it may enhance trust in Nigeria as an arbitral seat.
The Policy also pushes for the standardization of arbitration and ADR practices across the country. While this goal supports predictability for users, especially in cross-border matters, it must be implemented cautiously to avoid infringing on the constitutional autonomy of states or appearing to impose a rigid, one-size-fits-all regime. Countries that have achieved success as arbitration hubs, such as Switzerland, have done so in part by ensuring that users of their systems can rely on consistency regardless of the specific tribunal or institution involved. Nigeria's efforts in this regard create a more reliable legal environment for international commerce.
Furthermore, the improved arbitration framework supports Nigeria's broader ambitions in international trade. Key sectors such as oil and gas, infrastructure, and finance will benefit directly from quicker, clearer, and more reliable mechanisms for resolving commercial disputes. At the same time, Nigerian businesses will be better positioned to engage confidently in cross-border transactions, knowing that disputes can be resolved efficiently and transparently. As regional economic integration deepens particularly under frameworks like the AfCFTA, Nigeria's ability to offer a credible, rules-based dispute resolution system becomes even more vital.
In sum, while the Policy is not without its ambiguities and implementation challenges, its success could and should enhance Nigeria's appeal as a destination for international arbitration. To achieve this, however, the focus must shift from rhetorical commitments to structural enforcement reform, judicial training, and administrative consistency. Only then can Nigeria truly compete with established arbitration hubs known for neutrality, certainty, and enforceability
Challenges and Potential Hurdles
While the Policy represents a significant step forward in the Nigerian arbitration framework, there are several challenges that must be addressed for its full and effective implementation. Chief among these is the issue of institutional capacity and implementation gaps. However, rather than assuming direct responsibility for developing infrastructure such as regional arbitration centres and training programmes, the government's role should be to facilitate and incentivize private sector participation. Sustainable success will depend on the ability to create a regulatory and economic environment that empowers independent institutions and professional bodies to drive innovation, training, and service delivery in arbitration. Without this enabling framework and meaningful private sector engagement, the potential benefits of the Policy risk being undermined by weak or misdirected execution.
Another significant challenge is ensuring consistent judicial support and cooperation. Although the Policy states the need for a judiciary that is more arbitration-friendly, entrenched habits of court intervention and delays in enforcing arbitral awards persist. Ongoing judicial reforms will be critical to align court processes with the goals of the Policy. Without this support, parties may continue to view litigation as the default option or remain wary of arbitration outcomes being undermined at the enforcement stage.
A further hurdle lies in the area of stakeholder engagement and public awareness. The successful adoption of the Policy depends not only on institutional action but also on widespread acceptance and use by legal professionals, businesses and the broader public. Without sustained awareness campaigns and outreach efforts, key stakeholders may remain uninformed or skeptical about the advantages of ADR mechanisms. This could limit the uptake of ADR clauses in contracts and reduce the overall effectiveness of the Policy's ambitions.
Conclusion
The Policy is welcome. It represents a bold and commendable step towards repositioning Nigeria as a leading destination for international arbitration and commercial dispute resolution. The Policy's emphasis on institutional development, international alignment, and efficient dispute resolution mechanisms signals a strong intent to enhance Nigeria's attractiveness to global investors. However, its success will depend not only on effective implementation, and continued judicial support, but also on the ability of the government to foster an enabling environment in which the private sector can lead. Key aspects of the Policy such as regulatory clarity, coordination between federal and state authorities, and respect for party autonomy will require careful execution to avoid undermining the Policy's stated goals. Businesses, particularly those involved in cross-border trade, must prepare to leverage the opportunities and evolving risks presented by this policy by reviewing contract terms, adopting ADR clauses, and considering Nigeria as a potential seat for arbitration
Footnotes
1 Section 3.0(b) of the National Policy on Arbitration and Alternative Dispute Resolution 2024 (the "Policy").
2 Section 3.0(l) of the Policy
3 Section 3.0(e) of the Policy.
4 Section 3.0(g) of the Policy.
5 Section 3.0(f) of the Policy.
6 Section 4.2 of the Policy.
7 Paragraph 5.0 and Schedule 1 of the Policy.
8 Section 6.0 of the Policy.
9 Section 7.0 of the Policy.
10 Section 8.0 of the Policy.
11 Section 10.0 of the Policy.
12 Section 11.0 of the Policy.
13 Section 12.0 of the Policy.
14 Section 18.0(ii) of the Policy.
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