National Arbitration Policy Unveils Ambitious Plan To Position The Country As Africa’s Leading Dispute‑resolution Hub

In summary

This chapter examines Nigeria’s National Policy on Arbitration and ADR, 2024 and the strategic plan to position Nigeria as an attractive hub for domestic, regional and international commercial arbitration through intentional and coordinated institutional reforms. Beyond the statutory modernisation introduced by the Arbitration and Mediation Act 2023, the Nigerian government has realised that, in addition to having a modern arbitration law, there is a need to address other issues in the justice delivery ecosystem that would enhance Nigeria’s appeal as a hub for arbitration. Hence, the Policy lays out a comprehensive albeit ambitious road map for addressing such issues as knowledge gap and capacity building by way of training programmes for federal and state governments officials and judicial officers to update their ADR skill and knowledge. This includes training the federal and state government personnel on contract negotiation, drafting and implementation and managing arbitration matters. It also addresses the lack of modern infrastructure for conducting arbitration hearings, criteria for the selection and engagement of counsel and arbitrators in matters involving the government, and timeframes for the determination of arbitration-related matters, among others.

Discussion points

• Analysis of the National Policy on Arbitration and ADR, 2024 as an institutional reform instrument complementing the Arbitration and Mediation Act 2023.
• Examination of governance reforms affecting federal and state MDAs, including model dispute resolution clauses, merit-based appointment of arbitrators and counsel, and structured arbitration monitoring mechanisms.
• Assessment of judicial policy interventions, including stay of proceedings, specialised arbitration courts, punitive costs and indicative timelines for determination of arbitration-related matters and appeals.
• Evaluation of Nigeria’s seat-repositioning strategy, including strengthening of RCICAL, infrastructural commitments and preference for Nigeria as seat and venue of arbitration.
• Consideration of legislative continuity and the commitment to periodic enhancement of the arbitration framework following the 35-year lifespan of the Arbitration and Conciliation Act.
• Analysis of the Policy’s anticipated implications for investor confidence, institutional capacity, and Nigeria’s competitiveness as a regional arbitration hub.

Referenced in this article

• Arbitration and Mediation Act 2023.
• National Policy on Arbitration and Alternative Dispute Resolution (ADR), 2024.

Introduction

Despite recent legislative reform, arbitration in Nigeria continues to face certain challenges. While arbitration is widely promoted as offering the advantages of speed, efficiency and finality, scepticism persists among commercial stakeholders. Concerns are often expressed about protracted post-award litigation. These factors have fuelled the perception that arbitration in Nigeria is only but a preliminary skirmish before litigation.

It is against this background that, in October 2024, Nigeria adopted the National Policy on Arbitration and Alternative Dispute Resolution (ADR), 2024 (the Policy). The Policy itself is designed to catalyse Themes 7 (Alternative Dispute Resolution), 17 (Commerce and Economic Activities) and 20 (Compliance with Treaty Obligations) of the National Policy on Justice, 2024.

Paragraph 2.0 of the Policy articulates its goal as establishing fundamental principles to guide federal and state governments’ participation in arbitration references, while positioning Nigeria as an attractive hub for domestic, regional and international commercial arbitration, without compromising national interests. The emphasis on guiding governmental participation is particularly significant, as the state is frequently a party to high value commercial and investment disputes.

Paragraph 3.0 elaborates the Policy’s purpose in more granular terms. It seeks to promote compliance with Nigeria’s treaty obligations under key international arbitration instruments; encourage judicial culture aligned with party autonomy and minimal intervention; strengthen arbitral institutions and infrastructure; build professional capacity within government ministries and agencies responsible for managing arbitration; and provide clear policy direction on the negotiation and drafting of arbitration agreements in public contracts. The Policy also aims to reduce ambiguity in dispute resolution clauses, ensure properly coordinated participation by government entities in arbitral proceedings and position arbitration as a tool for economic development and investment attraction.

These objectives signal that the Policy is not concerned merely with legislative reforms. It is an institutional blueprint aimed at recalibrating arbitration practice, governmental behaviour and Nigeria’s positioning within the global arbitration landscape.

Federal government guidelines on dispute resolution clauses

One of the more practical and consequential aspects of the Policy appears in paragraph 5.0, which addresses the drafting of dispute resolution clauses in contracts involving federal and state Ministries, Departments and Agencies (MDAs). Rather than imposing rigid uniformity, the Policy preserves party autonomy by allowing government entities and their counterparties to agree on the arbitration rules that will govern their disputes. Where no specific agreement is reached, however, the Arbitration Rules or other ADR rules under the applicable Nigerian statute will apply by default.

This approach reflects an attempt to balance the overriding concept of party autonomy with flexibility and predictability. By preserving the freedom of parties to choose institutional or ad hoc rules, the Policy aligns with international arbitration practice and avoids unnecessarily constraining commercial negotiation. At the same time, by providing a statutory default, it reduces uncertainty where drafting is incomplete or imprecise.

More significantly, the Policy introduces model dispute resolution language to be adopted by federal and state MDAs. The provision of a model clause represents a deliberate effort to address the recurring problem of inconsistent, ambiguous or poorly structured arbitration clauses in government contracts. Pathological clauses, whether through conflicting seat designations, unclear appointment mechanisms, or hybrid references to litigation and arbitration, have historically generated preliminary jurisdictional disputes, thereby undermining efficiency at the outset of proceedings.

By mandating uniform model language for public-sector contracts, the Policy seeks to institutionalise drafting discipline and reduce avoidable legal loopholes. This initiative is particularly important given the scale of government participation in infrastructure, energy and public-private partnership transactions. Standardisation not only enhances clarity for counterparties but also signals that the state intends to approach arbitration in a structured and commercially coherent manner.

Viewed in context, paragraph 5.0 is less about technical drafting and more about governance reform. It recognises that arbitration efficiency begins at contract formation. A well-drafted clause reduces jurisdictional contestation, shortens procedural skirmishes and improves predictability. In this respect, the Policy moves arbitration reform upstream, targeting the negotiation and drafting stage rather than focusing solely on dispute resolution after conflicts arise.

Selection of arbitrators by federal and state MDAs

Paragraph 6.0 of the Policy introduces a structured framework for the appointment of arbitrators in disputes involving federal and state Ministries, Departments and Agencies (MDAs). The provision reflects a deliberate effort to professionalise governmental participation in arbitration and to ensure that appointments are competence-driven rather than discretionary or politically influenced.

Where parties agree to a three-member tribunal, the arbitrator appointed on behalf of the federal or state MDA must be an ADR expert possessing the requisite qualification and competence to act as an arbitrator. In international commercial arbitrations involving government entities, the Honourable Attorney-General of the Federation (HAGF) or the Honourable Attorney-General of the relevant state may request the Director of the Regional Centre for International Commercial Arbitration, Lagos (RCICAL), to appoint suitably qualified Nigerian arbitrators on behalf of the government. Where a sole arbitrator is to be appointed, the Policy similarly requires that the individual be a suitably qualified and competent Nigerian arbitrator.

The Policy further centralises oversight of high-value appointments. In disputes exceeding 50 million naira, appointments must proceed with the approval of the HAGF or the relevant State Attorney-General. Below that threshold, parties may proceed without such recourse. Where parties fail to agree on an appointment mechanism or appointing authority, the HAGF or State Attorney-General is empowered to request RCICAL or another centre to appoint qualified arbitrators on behalf of the government entity.

These provisions are significant for several reasons. First, they signal an intention to institutionalise merit-based selection in arbitration appointments involving government entities. Historically, concerns have occasionally been expressed within professional circles that arbitral appointments in public-sector disputes were not always anchored strictly on demonstrable expertise in arbitration. By expressly requiring that appointed arbitrators be ADR experts with requisite qualifications and competence, the Policy seeks to align government appointments with international standards of professional credibility.

Second, the involvement of the Attorney-General and RCICAL introduces an additional layer of oversight and institutional coordination. While this centralisation may lengthen internal approval processes in some cases, it reflects an effort to ensure consistency in appointment strategy across ministries and agencies, particularly in high-value disputes with potential fiscal implications.

Third, the emphasis on appointing suitably qualified Nigerian arbitrators underscores a broader objective of strengthening domestic arbitration capacity. Encouraging the appointment of competent Nigerian arbitrators in international proceedings contributes to skill development, institutional maturity and international visibility for Nigeria’s arbitration community.

Paragraph 6.0 represents more than a procedural directive. It reflects a structural shift in how government entities are expected to approach arbitration appointments, moving from ad hoc decision-making toward a coordinated, competence-driven and institutionally supervised model. If consistently implemented, this reform has the potential to enhance the quality of arbitral decision-making in disputes involving government entities and to strengthen confidence in Nigeria’s arbitral ecosystem.

Criteria for engagement of counsel

Paragraph 7.0 of the Policy addresses another critical dimension of governmental participation in arbitration, which is engagement of legal counsel. The provision requires federal and state MDAs to adopt a clear and transparent process for appointing Nigerian counsel in arbitration and ADR proceedings. It further provides that where foreign counsel is engaged, the Nigerian counsel retained by the relevant MDA must be informed, and where foreign counsel is engaged on grounds of expertise, such counsel must partner with Nigerian counsel to facilitate knowledge transfer and capacity development.

At its core, the provision institutionalises merit as the primary determinant in the selection of counsel. The Policy expressly states that the choice of counsel shall be based on technical ability, expertise in international arbitration and ADR and depth of experience relevant to the dispute in question. Both Nigerian and foreign counsel must be selected using reasonable criteria reflective of professional qualification and competence.

This framework is significant in several respects. First, it reinforces a broader shift toward professionalisation and away from discretionary or patronage-based engagement practices. By explicitly grounding the selection of counsel in demonstrable expertise and experience, the Policy signals that representation of government entities in arbitration should be entrusted to practitioners with the technical capacity to manage complex commercial disputes effectively.

Second, the structured engagement of foreign counsel, where necessary, coupled with a requirement of collaboration with Nigerian counsel, reflects a deliberate strategy of domestic capacity building. Rather than excluding international expertise, the Policy seeks to integrate it into a model that strengthens local practitioners through direct participation in high-value or complex proceedings. This approach balances the need for specialised expertise in certain disputes with the long-term objective of deepening Nigeria’s arbitration competence base.

Third, the transparency requirement introduces governance discipline in the engagement process. Given the fiscal and reputational implications of arbitral disputes involving government entities, clarity in the criteria for counsel selection is intended to enhance accountability and improve confidence in the state’s dispute management strategy.

By embedding merit-based counsel selection and structured collaboration into policy, the federal government seeks to ensure that disputes involving public entities are managed by qualified professionals, thereby improving strategic consistency and enhancing the chances for favourable outcomes.

Strengthening the Regional Centre for International Commercial Arbitration

Paragraph 9.0 of the Policy addresses institutional capacity at the structural level by focusing on the Regional Centre for International Commercial Arbitration, Lagos (RCICAL). The federal government undertakes to comply with its obligations under the Treaty with the Asian African Legal Consultative Organisation (AALCO) in respect of the Centre, including the provision of annual funding grants, the development of a befitting structure equipped with facilities of international standard and the recruitment of qualified professional staff. The Policy further contemplates legislative amendment of the RCICA Act¹ to align it with the terms of the Headquarters Agreement 1999 (as amended in 2015).

These commitments reflect recognition that arbitral credibility is not sustained by legal frameworks alone, but also by institutional infrastructure. The availability of modern hearing facilities, professional administrative support, technological capability and structured institutional governance significantly influences seat selection decisions in high-value commercial disputes. Where such infrastructure is perceived to be lacking or inadequate, parties frequently designate foreign seats or venues with established institutional reputations.

By committing to funding, structural upgrades and legislative alignment, the Policy seeks to reposition RCICAL as a fully equipped arbitral centre capable of administering domestic, regional and international arbitrations to international standards. If effectively implemented, this initiative would address one of the practical reasons parties have historically opted for foreign seats such as London or Paris in disputes involving Nigerian entities. The availability of a credible, well-resourced institutional venue reduces the need to externalise proceedings solely for infrastructural or administrative reasons.

The proposed amendment of the RCICA Act is equally significant. Legislative alignment with Nigeria’s treaty obligations under AALCO signals a willingness to modernise the Centre’s governance framework and clarify its institutional mandate. This suggests an effort not merely to refurbish facilities, but to strengthen the Centre’s normative and operational foundation.

In this respect, paragraph 9.0 represents a tangible infrastructure-focused intervention. It acknowledges that seat competitiveness depends on more than judicial policy or drafting reform; it requires visible institutional capacity. Whether these commitments translate into sustained funding, structural completion and professional staffing will ultimately determine their impact, but the Policy clearly identifies RCICAL as central to Nigeria’s ambition to function as a credible arbitration hub.

Capacity building, contract discipline and arbitration monitoring

Paragraph 10.0 of the Policy moves arbitration reform beyond appointment and infrastructure into the domain of institutional governance. It recognises that outcomes in commercial disputes are often shaped at the stages of contract negotiation, drafting and implementation monitoring long before disputes arise.

For federal MDAs, the Policy mandates capacity development within the Federal Ministry of Justice and other relevant personnel tasked with managing arbitration and ADR processes. The Ministry is assigned specific responsibilities, including participation in the negotiation and drafting of commercial contracts involving federal and state MDAs, particularly where foreign parties are involved; monitoring implementation of such contracts; and supervising ongoing commercial arbitration and ADR proceedings involving the federal government. A structured reporting mechanism is introduced, requiring bi-annual reports from the Civil Litigation Department to the Honourable Attorney-General of the Federation.

A similar framework is extended to state governments and their Ministries of Justice. Capacity development is to be prioritised, with state ministries tasked with monitoring contract implementation and supervising arbitration or ADR proceedings involving the states. Bi-annual reporting to the respective State Attorneys-General is similarly required.

By centralising negotiation oversight and monitoring responsibilities within Ministries of Justice, the Policy seeks to ensure consistency in drafting, early identification and evaluation of contractual risk and strategic management of disputes.

Particularly noteworthy is the requirement that disputes emanating from investment agreements be centrally managed by a coordinated team comprising representatives of the federal or state Ministries of Justice and relevant officers of the Nigerian Investment Promotion Commission (NIPC). This provision recognises the strategic implications of investor-state disputes and seeks to create a feedback loop whereby lessons from dispute management inform future negotiation of international investment agreements. In effect, arbitration experiences are used for institutional learning.

Viewed collectively, paragraph 10.0 reflects a preventive governance model. Rather than treating arbitration as a reactive process triggered by contractual breakdown, the Policy embeds arbitration consciousness into contract formation, monitoring and dispute oversight. Capacity building in this context is not limited to training arbitrators or counsel; it extends to strengthening institutional memory, coordination and strategic consistency within government entities. If sustained, this reform could materially reduce avoidable disputes, improve dispute preparedness and enhance Nigeria’s credibility in both commercial and investment arbitration contexts.

Seat and venue of arbitration

Section 13.0 of the Policy confronts directly a longstanding structural reality: a significant proportion of arbitrations involving Nigeria and its governmental entities are seated outside the country. The Policy candidly attributes this trend to factors such as infrastructural limitations, international patronage patterns, enforcement concerns and broader perception issues. The acknowledgement itself is noteworthy. Rather than assuming seat competitiveness, the Policy recognises the need to earn it.

In response, the Policy expresses a clear preference for Nigeria to serve as the seat and venue of arbitration. Governmental bodies are encouraged to stipulate Nigeria as the seat in arbitrations involving federal and state MDAs, with the RCICAL identified as the default appointing authority where necessary. This represents a deliberate attempt to internalise disputes that might otherwise be externalised to established arbitral centres abroad.

Seat selection carries implications beyond geography. It determines the procedural law governing the arbitration, the supervisory court and the broader judicial culture that will interact with the award. By promoting Nigeria as a preferred seat, the Policy seeks to align dispute resolution with domestic institutional development and to strengthen the local arbitration ecosystem. It also reflects an understanding that seat competitiveness influences foreign direct investment.

The Policy extends this approach to sub-national entities. It contemplates that disputes involving state governments and their agencies below certain monetary thresholds should undergo ADR processes at designated Multi-Door Courthouses (MDCs), with guidelines to be issued by the Federal Ministry of Justice. Private sector entities are similarly encouraged to utilise ADR mechanisms at MDCs and other government-supported ADR centres in the first instance. These provisions underscore a broader objective of embedding ADR culture within both public and private sectors practice in Nigeria.

Beyond seat designation, section 13.0 links arbitration reform to judicial specialisation and procedural modernisation. The government undertakes to encourage the establishment of specialised commercial divisions and small claims courts, expansion and strengthening of ADR centres, electronic filing systems and judicial retraining initiatives aligned with the economic objectives of Theme 17 of the National Policy on Justice. This integration signals that arbitration competitiveness cannot be isolated from broader court administration reform.

If effectively implemented, these measures could reduce the structural incentives that have historically driven parties toward foreign seats. The availability of credible institutional facilities, coordinated appointment mechanisms, specialised courts and efficient procedural administration diminishes the practical need to externalise proceedings to jurisdictions such as London or Paris purely for reasons of infrastructure or predictability. At the same time, seat preference cannot operate in isolation from performance. Seat preference or competitiveness ultimately depends on consistent implementation, institutional credibility and judicial reliability.

Section 13.0 therefore represents both aspiration and acknowledgement. It recognises and acknowledges the challenges that fuel the preference for foreign seats in arbitrations related to or originating from Nigeria and outlines concrete commitments aimed at addressing those challenges. Whether Nigeria evolves from being primarily a “dispute-exporting country” to an attractive seat of arbitration would depend on the implementation of these initiatives.

Legislative framework

Section 14.0 of the Policy provides that federal and state governments commit to regularly enhance the enabling legislative framework for arbitration and ADR in Nigeria. Although succinct, this commitment must be read against Nigeria’s recent legislative history.

For 35 years, arbitration practice in Nigeria was governed by the Arbitration and Conciliation Act, originally enacted in 1988. Over time, it became evident that the statute required significant updating to reflect evolving international standards and to address gaps revealed through judicial interpretation. Yet reform did not occur incrementally. Instead, it took over three decades before comprehensive root and branch legislative overhaul materialised in the form of the Arbitration and Mediation Act 2023 (the AMA).

That experience offers an important lesson. In a rapidly evolving field such as international arbitration, legislative stagnation can gradually erode competitiveness. Leading arbitral jurisdictions refine their frameworks periodically, responding to developments in funding, emergency relief, enforcement practice and institutional design. Where reform is deferred for decades, the jurisdiction risks lagging behind global benchmarks.

Section 14.0 can therefore be understood as an institutional commitment not to repeat that cycle of prolonged dormancy. If implemented in substance rather than rhetoric, it signals that arbitration legislation in Nigeria should be subject to periodic review and responsive adjustment rather than generational overhaul.

Within Nigeria’s federal structure, this is particularly significant. Harmonised and forward-looking reform across federal and state levels reduces fragmentation and enhances predictability for users of arbitration. For investors and commercial parties, a visible commitment to continuous legislative refinement strengthens confidence that the jurisdiction will remain aligned with international best practice.

The true measure of this provision will lie in whether mechanisms are developed to operationalise regular review. If taken seriously, however, section 14.0 represents an implicit acknowledgment that arbitration reform must be sustained and that Nigeria cannot afford another 35-year wait before modernising its dispute resolution framework.

Role of the courts: towards a national judicial policy on arbitration

Section 15.0 of the Policy represents one of its most consequential interventions. It seeks to embed arbitration support within judicial administration itself, effectively articulating what may be described as a National Judicial Policy on Arbitration.

The section builds on an earlier circular issued by the former Chief Justice of Nigeria, Honourable Justice Walter Samuel Onnoghen, GCON, encouraging Heads of Courts to issue specialised rules to fast-track arbitration-related proceedings. The Policy now elevates that approach into a structured national commitment.

First, it reiterates and reinforces judicial restraint in the face of arbitration agreements. Courts are enjoined to refrain from entertaining actions brought in breach of arbitration clauses without first giving effect to those clauses. They are further encouraged to stay proceedings where there is no reason why the matter should not be referred to arbitration. While the AMA already mandates referral to arbitration in defined circumstances, the Policy frames this not merely as a statutory obligation but as a matter of judicial culture and discipline.

Second, the Policy encourages structural differentiation within the court system. Heads of Courts are urged to designate one or more courts, as necessary, for the hearing and determination of arbitration-related matters, having regard to case volume. The development of practice directions on arbitration and ADR is also encouraged. These measures recognise that consistency and expertise in arbitration matters are enhanced when such cases are concentrated before specialised judges or divisions rather than diffused across the general docket.

Third, the Policy addresses procedural abuse. Courts are expressly enjoined, in deserving cases, to award punitive costs against lawyers and litigants who use court processes to frustrate arbitration and ADR. This is a significant signal. It acknowledges that dilatory tactics and strategic post-award challenges have historically undermined arbitration’s perceived efficiency and usefulness. By encouraging the use of costs as a deterrent, the Policy seeks to discourage the use or more accurately the abuse of the court system to frustrate enforcement of arbitral awards.

Perhaps most striking are the indicative timelines introduced for arbitration-related court proceedings. Judicial proceedings arising from arbitration and ADR are expected to be determined within 60 days from the date of filing, subject to agreement of the court and alignment with existing rules. Appeals arising from such decisions are envisaged to be determined within 270 days from the date of filing, again subject to institutional agreement. The Policy further contemplates that appeals from arbitration and ADR matters should terminate at the Court of Appeal.

These proposals are aspirational in character and contingent upon institutional buy-in. Arbitration-related court proceedings, such as applications for recognition, enforcement or setting aside of awards, are typically commenced by motion on notice, determined on affidavit evidence and written submissions and do not involve full trials. In structural terms, such proceedings are inherently capable of expeditious resolution and a 60-day determination window is commercially realistic if prioritised within the judicial docket. However, the translation of these timelines into binding procedural mandates would require coordinated administrative implementation by Heads of Courts and, in certain respects, legislative support. In particular, the proposal that arbitration-related appeals terminate at the Court of Appeal would require amendment of the existing constitutional framework governing appellate jurisdiction. The timelines therefore signal a strong policy commitment to expedition, but their enforceability will ultimately depend on sustained institutional alignment.

The Arbitration Proceedings Rules under the AMA already provide for prioritisation of arbitration appeals. Rule 12 requires that an arbitration appeal be entered on the court’s list such that its first hearing occurs not later than six months after the filing of the record of appeal. The Policy’s 270-day indicative appeal timeline goes further. Whereas Rule 12 regulates only the scheduling of the first hearing, the Policy contemplates determination of the entire appeal within 270 days from the filing of the appeal itself. In this sense, the Policy expands the AMA’s front-loaded prioritisation into a broader institutional expectation of expedition across the full arbitration-related appellate cycle.

Together, these provisions attempt to reclassify arbitration-related litigation as a distinct and prioritised category within the judicial system. The objective is clear: limited court supervision should not mutate into open-ended appellate cycles capable of undermining the advantage of speedy case resolution that arbitration claims to offer.

The practical significance of this section lies in its ambition. It does not merely restate existing statutory principles. It seeks to institutionalise a pro-arbitration posture across all levels of the judiciary, align procedural timelines with commercial expectations and curtail the risk of arbitration being subsumed within general litigation congestion.

Section 15.0 sends a strong message: arbitration in Nigeria is no longer to be treated as an ordinary civil matter. It is to be supported, protected and administered within a specialised judicial framework designed to preserve its core attributes of efficiency, finality and commercial certainty.

Conclusion

The Policy represents a deliberate attempt to reposition Nigeria’s arbitration landscape through coordinated institutional reforms. While the AMA modernised the statutory framework, the Policy addresses structural and behavioural dimensions that legislation alone cannot resolve.

Its provisions on model dispute resolution clauses, merit-based appointment of arbitrators and counsel, capacity building within federal and state MDAs, strengthening of RCICAL, seat preference, legislative review and the role of the courts collectively signal an intention to professionalise and institutionalise arbitration practice in Nigeria.

The Policy’s ultimate significance will depend on implementation. Many of its commitments require sustained administrative coordination across federal and state institutions, judicial and legislative alignment and consistent funding. If followed through with implementation, the Policy has the potential to enhance investor confidence, strengthen Nigeria’s credibility as a seat of arbitration and embed arbitration more firmly within the country’s commercial dispute resolution architecture.

The AMA recalibrated Nigeria’s legal framework. The National Arbitration Policy now seeks to ensure that institutional practice matches that reform. Whether this alignment is maintained over time will determine the realisation of Nigeria’s ambition to emerge as a leading arbitration hub in Africa. The Policy does not guarantee transformation but it establishes the architecture within which transformation can occur. The decisive variable is implementation.

Footnote

1 Chapter R5, Laws of the Federation of Nigeria 2004.

Originally published by GAR.