NIGERIA Trends and Developments Contributed by: Vincent Owhor, Akinola Samuel Oladimeji and Zaynab Abdussalam, Streamsowers & Köhn
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A Nigerian Perspective on Collective Arbitration Arbitration has long been recognised as one of the most effective methods for resolving commercial dis- putes. Compared to litigation, arbitration offers pri- vacy, procedural flexibility, and efficiency. Traditionally, arbitration has been limited in scope because it usu- ally arises from a bilateral agreement and requires the consent of the parties. This concept, however, raises a critical question: can arbitration evolve to accommo- date disputes involving multiple or grouped parties? In litigation, courts have developed tools such as class actions and representative suits to manage such com- plexities. Arbitration, however, remains constrained by the requirement that only parties bound by the same arbitration clause in the same agreement may partici- pate. This creates a friction between the efficiency that group arbitration could offer and the consent-based nature of arbitral proceedings. This article therefore examines the evolving concept of group or collective arbitration, with a particular emphasis on how Nigerian law addresses the above- mentioned challenges. The concept of group arbitration Group arbitration arises from the same economic rationale that underpins class actions in litigation ‒ that is, the need to make dispute resolution acces- sible and cost-effective for parties with relatively low- value claims. When individual arbitration is financially impractical, claimants may benefit from combining their efforts in a single proceeding, thereby sharing costs and streamlining the process.
Beyond cost efficiency, group arbitration offers addi- tional advantages. It reduces the risk of inconsistent awards, avoids duplicative procedures, and allows for the selection of a neutral with subject-matter exper- tise. Compared to class litigation, group arbitration also provides greater procedural flexibility and facili- tates enforcement across jurisdictions. It is essential to distinguish between two forms of group arbitration. Collective arbitration, which is the focus of this article, involves similarly situated claim- ants jointly pursuing related claims in a single pro- ceeding often through joint, consolidated or concur- rent arbitration. In contrast, class arbitration is initiated by a representative party on behalf of a broader group, including absent members. Whereas collective arbi- tration binds only those who opt in, class arbitration binds absent parties unless they opt out. Collective arbitration under the Arbitration and Mediation Act 2023 As part of its efforts to strengthen dispute resolution mechanisms, Nigeria has replaced the Arbitration and Conciliation Act (ACA) with the more comprehensive Arbitration and Mediation Act 2023 (AMA). The AMA introduced key innovations designed to accommo- date collective arbitration ‒ notably, through provisions that allow for consolidation of related proceedings, concurrent hearings, the resolution of deadlocks in appointing arbitrators, and the joinder of additional parties. Consolidated/concurrent arbitral proceedings Section 39 of the AMA introduced a framework for the consolidation of arbitral proceedings and the conduct of concurrent hearings. This is an innovation absent
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