NIGERIA Law and Practice Contributed by: Tayo Oyetibo LP
In practice, ADR is most commonly invoked prior to the commencement of formal proceedings, particu- larly when parties seek an expedient and cost-effec- tive resolution. However, it is not uncommon for ADR to be pursued after litigation has commenced, either voluntarily by the parties or upon referral by the court, typically during case management or pre-trial stages. In such instances, proceedings are usually stayed to enable the parties to explore a settlement. Where ADR is successful, the terms of settlement are presented to the court and entered as a consent judgment, thereby bringing the litigation to an end. With respect to limitation periods, the position is now clarified under the Arbitration and Mediation Act 2023. Section 71 of the Act provides that the period between the commencement of arbitration and its termination shall be excluded in computing time for the purposes of any applicable limitation law. This ensures that a party is not prejudiced or time-barred while bona fide pursuing arbitration. However, it is important to note that this statutory suspension applies specifically to arbitration. In the case of other ADR mechanisms, such as mediation or negotiation, there is no automatic suspension of limitation periods unless otherwise agreed by the par- ties or provided for by specific rules. 4.6 Costs The allocation of costs in ADR proceedings in Nigeria depends largely on the nature of the ADR mechanism, the applicable rules and, most importantly, the agree- ment of the parties. In arbitration, the arbitral tribunal typically has the power to determine costs, subject to the parties’ agreement and any applicable institutional rules. Costs generally include arbitrators’ fees, administra- tive expenses, legal fees and other costs incurred in the proceedings. The prevailing principle is that costs follow the event, such that the unsuccessful party may be ordered to bear all or a substantial portion of the costs. However, tribunals retain a broad discretion and may apportion costs between the parties, having regard to factors such as the conduct of the parties and the outcome of the proceedings.
In mediation and other non-adjudicatory ADR pro- cesses, costs are usually shared equally between the parties, unless otherwise agreed. Each party typically bears its own legal costs. Where the mediation is con- ducted under an institutional framework, such as the Lagos Multi-Door Courthouse, the applicable rules may prescribe how administrative and mediator fees are to be borne. Where ADR results in a settlement, the parties are at liberty to agree on the allocation of costs as part of the settlement terms. Such an agreement is often incorporated into the settlement agreement or con- sent judgment. In summary, while arbitration permits a more formal and discretionary approach to cost allocation, often aligned with the outcome of the dispute, non-binding ADR mechanisms such as mediation are generally characterised by cost-sharing arrangements, subject to party agreement. 4.7 Courts and ADR The Nigerian courts have, over time, adopted a strongly pro-ADR stance, actively encouraging the use of alternative dispute resolution mechanisms as an integral component of the justice delivery system. This policy orientation is driven by the need to pro- mote efficiency, reduce court congestion and facilitate the expeditious resolution of disputes. Legal fees in Nigeria are regulated by a combination of statutory instruments and professional oversight mechanisms that aim to ensure fairness, transparency and the maintenance of professional standards within the legal profession. The principal regulatory framework is the Legal Practi- tioners Remuneration Order 2023 (“the Remuneration Order”), which prescribes guidelines for the charging of legal fees. The Order sets out minimum fee thresh- olds, particularly in respect of certain categories of transactions and services, with a view to preventing undercutting and maintaining the integrity of the pro- 5. Costs, Fees and Funding 5.1 Legal Fees
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