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Arbitration has always promised something the traditional court system often struggles to deliver: speed, flexibility, and neutrality. In today's interconnected world, where businesses collaborate across borders and disputes arise in highly technical fields, arbitration is no longer just an "alternative", it is increasingly the preferred method of dispute resolution. For Nigeria, Africa's largest economy, the future of arbitration carries both promise and pressure. The recently enacted Arbitration and Mediation Act 20231 and National Policy on Arbitration and ADR 20242 have positioned the country for transformation. But the journey is far from straightforward.
Arbitration in Nigeria: Where We Stand
For decades, Nigeria's arbitration framework was governed by the 1988 Arbitration and Conciliation Act. It served its purpose in its time, but as international arbitration practices evolved, its gaps became clear. Practitioners pointed to limited interim relief mechanisms, weak enforcement provisions, and the absence of modern features found in UNCITRAL's model laws.
The Arbitration and Mediation Act 2023 has now modernized this framework. Among other things, it introduces procedures for third-party funding and emergency arbitrator provisions (International Bar Association, 2023). These reforms align Nigeria with global standards and signal that the country is serious about developing into a regional arbitration hub (Chambers and Partners, 2025).
Complementing this, the National Policy on Arbitration and ADR (Mondaq, 2024) aims to standardize and promote ADR practices across all sectors. It represents a coordinated effort to create a unified, consistent system that is both accessible and credible.
Persistent Challenges
Still, the road to a thriving arbitration culture in Nigeria is not without obstacles:
i. Enforcement Delays: Even with new laws, parties often face lengthy battles in court to recognize or enforce arbitral awards, undermining arbitration's promise of speed3.
ii. Institutional Capacity: Nigeria lacks arbitration centers with the global reputation of London, Singapore, or Hong Kong (Chambers and Partners, 2025). Without strong institutions, even the best legal frameworks can struggle to gain international confidence.
iii. Perception Issues: Many Nigerian businesses, especially small and medium-sized enterprises, still see arbitration as elitist and expensive compared to traditional litigation. This mindset persists despite arbitration often being faster and more predictable in outcome4.
iv. Technical Gaps5: Arbitration in fields like technology, energy, and intellectual property requires subject-matter knowledge. Nigeria is still developing a deep bench of arbitrators who specialize in these complex sectors.
Opportunities on the Horizon
Despite the challenges, there are significant opportunities for Nigeria to build a vibrant arbitration culture:
1. Leveraging the New Act: The Arbitration and Mediation Act 20236 provides a legal framework comparable to that of international arbitral seats. If implemented effectively, it could attract foreign investment and cross-border dispute resolution.
2. Technology and Innovation: Digital platforms and artificial intelligence now offer tools that can make arbitration more efficient, transparent, and cost-effective. For example, virtual hearings and document management systems can reduce administrative delays and make proceedings more inclusive, especially for foreign participants.
3. Specialization: As the Nigerian economy diversifies with ample growth in fintech, entertainment, and renewable energy, there is an urgent need to train arbitrators in these fields. Specialized knowledge enhances credibility and ensures that decisions reflect both commercial reality and legal soundness.
4. Regional Integration: With the African Continental Free Trade Area (AfCFTA) now operational, Nigeria can present itself as the default seat for African cross-border arbitration. This would not only strengthen the local arbitration ecosystem but also boost Nigeria's reputation as a trusted venue for resolving complex continental disputes.
Lessons from Global Best Practices
To achieve these opportunities, Nigeria must look outward. Successful arbitral hubs like Singapore and Hong Kong built credibility by creating specialist courts and rules for sectors like intellectual property and maritime disputes. The WIPO Arbitration and Mediation Center, for instance, has shown how confidentiality and subject-matter expertise can make arbitration particularly attractive for IP disputes.
Global best practices suggest three priorities for Nigeria:
i. Judicial Support: Courts must adopt a more arbitration-friendly stance, limit interference, and support enforcement7.
ii. Institutional Strengthening: Nigerian arbitral institutions should enhance transparency, adopt modern rules, and actively market their services internationally.
iii. Capacity Building: Training programs should focus not just on arbitration procedure but also on niche fields like IP, technology, and energy law.
The Case of Intellectual Property Disputes
Intellectual property is the currency of Nigeria's booming creative economy — from Afrobeats and Nollywood to software startups and fashion houses. Yet when disputes arise over copyright, trademarks, or licensing, parties often find themselves stuck in a system ill-suited for fast, confidential, and technically complex issues.
In many jurisdictions, IP disputes are considered arbitrable, and parties use arbitration to ensure confidentiality and access to expert decision-makers. In Nigeria, however, the arbitrability of IP remains contested. Some argue that because IP rights are granted by statute, they should only be adjudicated in court. Others point out that licensing and contractual issues involving IP are perfectly suited to arbitration.
The potential benefits of IP arbitration in Nigeria are clear:
i. Confidentiality protects trade secrets and sensitive licensing terms.
ii. Expertise ensures disputes are handled by professionals familiar with IP law.
iii. Cross-Border Enforcement allows Nigerian creatives and tech firms to enforce awards internationally
To unlock this potential, Nigeria must take deliberate steps:
i. Clarify the arbitrability of IP disputes in legislation.
ii. Adopt WIPO model clauses in contracts, and
iii. Develop a cadre of arbitrators with IP expertise.
Conclusion
Arbitration in Nigeria stands at a crossroads. With the Arbitration and Mediation Act 2023 and a new national policy, the legal foundation for a modern arbitration system is finally in place. But laws alone are not enough. To realize arbitration's promise, Nigeria must strengthen institutions, embrace technology, and cultivate specialized expertise.
Nowhere is this more urgent than in the field of intellectual property. As Nigeria's creative and digital industries expand, the demand for fast, confidential, and globally enforceable dispute resolution will only grow. Arbitration offers the ideal platform. If Nigeria has the courage to make it work.
The future of arbitration in Nigeria is bright, but it depends on the choices we make today.
Footnotes
1 https://www.acerislaw.com/wp-content/uploads/2023/08/New-Nigerian-Arbitration-and-Mediation-Act.pdf
2 https://www.templars-law.com/app/uploads/2025/03/National-Policy-on-Arbitration-and-ADR-2024.pdf
3 https://www.whitecase.com/insight-alert/new-arbitration-regime-comes-force-nigeria
5 https://www.ibanet.org/ip-july-2021-ip-property-disputes-nigeria
6 https://www.acerislaw.com/wp-content/uploads/2023/08/New-Nigerian-Arbitration-and-Mediation-Act.pdf
7 https://www.whitecase.com/insight-alert/new-arbitration-regime-comes-force-nigeria
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