NIGERIA Law and Practice Contributed by: Tayo Oyetibo LP
typically predicated on an arbitration clause in the underlying contract, which delineates the categories of disputes to be referred to arbitration. Arbitration is particularly favoured where parties require technical expertise, confidentiality and finality in the resolution process. Mediation is increasingly utilised as a flexible and party-driven mechanism, particularly where the pres- ervation of commercial relationships is desirable. It involves the intervention of a neutral third party who facilitates discussions between the disputing parties without imposing a binding decision. Mediation is now formally recognised and governed by the Arbitration and Mediation Act, 2023 and is often encouraged by courts as a preliminary step in dispute resolution. Conciliation, though less frequently distinguished in practice from mediation, similarly involves the assis- tance of a neutral third party in facilitating settlement, sometimes with a more evaluative role. It is recognised under the same statutory framework and is utilised in appropriate circumstances where a guided settlement process is preferred. Negotiation remains the most informal and founda- tional dispute resolution mechanism. It involves direct engagement between the parties, without a third party, with a view to reaching a mutually acceptable resolution. It is often the first step in resolving disputes and may either culminate in settlement or precede recourse to more formal mechanisms. In practice, while litigation continues to dominate, there is a clear and increasing preference for arbitra- tion and mediation in commercial disputes, particu- larly those of a complex, technical or relationship- sensitive nature. 1.3 Key Dispute Resolution Trends Nigeria, as a common law jurisdiction, has witnessed significant and progressive developments in its dis- pute resolution landscape in recent years. Several key trends are noteworthy. First, there has been a marked shift towards arbitra - tion as a preferred mechanism for resolving com- mercial disputes, particularly following the enact-
ment of the Arbitration and Mediation Act 2023. The Act represents a modern, forward-looking legislative framework that aligns Nigeria with international best practices. Notably, it introduces provisions recognis- ing third-party funding in arbitration, enhances the enforceability of arbitration agreements and awards and accommodates the use of technology in arbitral proceedings. In parallel, institutional arbitration has continued to develop, with bodies such as the Region- al Centre for International Commercial Arbitration Lagos, incorporating provisions for virtual hearings and other procedural innovations within their rules. Secondly, there has been an increasing adoption of technology across both litigation and ADR processes. Nigerian courts now routinely deploy virtual hearing platforms, including Zoom and Microsoft Teams, par- ticularly following the adaptations necessitated by the COVID-19 pandemic. This has improved efficiency, reduced logistical constraints and enhanced access to justice, especially in complex and multi-jurisdic- tional disputes. A further emerging trend is the growing integration of artificial intelligence and digital tools in dispute reso- lution practice. While still evolving, legal practition- ers are increasingly utilising AI-assisted platforms for legal research, document review and drafting, thereby improving efficiency and reducing turnaround times in dispute management. In addition, there has been a sustained institutional emphasis on the use of alternative dispute resolution mechanisms, particularly mediation. Many jurisdic- tions in Nigeria have implemented mandatory pre- action protocols requiring parties to demonstrate that they have explored amicable settlement options before commencing litigation. This requirement, which originated in jurisdictions such as Lagos and the Federal Capital Territory, has now been adopted, in varying forms, across several states. The effect has been to encourage early resolution of disputes and to reduce the burden on the courts. Taken together, these developments reflect a clear tra- jectory towards a more modern, efficient and arbitra- tion-friendly dispute resolution framework, position-
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