NIGERIA Trends and Developments Contributed by: Muyiwa Ogungbenro and Daniel Adegbamigbe, Olajide Oyewole LLP (DLA Piper Africa, Nigeria)
with the appeal process being fast-tracked to ensure timely resolution. While the Policy’s intentions of providing a stream - lined, cost-effective mechanism for resolving smaller disputes are commendable, the framework bears more resemblance to a court system than a true arbi - tration process. Several key elements of the Policy deviate from the essential principles of arbitration, which are rooted in parties’ agreement to arbitrate, party autonomy, and the role of arbitrators rather than judges. Firstly, arbitration is fundamentally a consensual pro - cess. Arbitration cannot proceed unless both par - ties have explicitly agreed to submit their dispute to arbitration. However, the Policy does not reflect this essential feature of arbitration. The proposed system seems more like a small claims court where parties do not necessarily have to consent to the process. The Policy lacks clear mechanisms to ensure that the parties voluntarily choose arbitration as a means of resolving their disputes. This omission suggests a departure from the consensual nature of arbitration and leans more towards a compulsory judicial pro - cess. Secondly, the Policy’s emphasis on resolving disputes before a judge rather than an arbitrator fundamentally undermines the arbitration process. In arbitration, an arbitrator is chosen by the parties, typically based on expertise in the subject matter of the dispute. Arbi - tral tribunals are often empowered to issue binding awards with very limited ground to appeal. In contrast, the Policy envisages resolution of disputes by a judge. For several years, the Nigerian arbitration community has fought for limited intervention by the courts in arbitration. The recent Arbitration and Mediation Act 2023 is centred on this objective. With respect to arbi - tration of small claims, it does appear that the Policy is not in line with the Act. Moreover, the Policy does not incorporate some of the defining features of arbitration, such as the abil - ity of the parties to agree on the rules governing the proceedings, the selection of arbitrators, and the over - all structure of the process. Instead, the small claims procedure outlined in the Policy is heavily influenced
by judicial oversight, with practice directions to be issued by Chief Judges, which imposes judicial rules rather than allowing the parties to shape the arbitra - tion process themselves. Additionally, the possibility of appeals introduces another key distinction between the proposed system and arbitration. Arbitration awards are typically final and binding, with very limited grounds for appeal – primarily in cases of procedural irregularities or bias. In contrast, the Policy allows appeals to the Federal or State High Courts, which further distances the system from the finality characteristic of arbitration. The appeal process, although fast-tracked, aligns the framework more closely with litigation than arbitration. Finally, while the goal of the Policy is to provide a sim - plified, low-cost mechanism for dispute resolution, the heavy judicial involvement, the lack of parties’ control over the process, and the introduction of an appeal system all indicate that the framework proposed is more aligned with a small claims court than with a true arbitration model. If the objective is to create a genuine small claims arbitration system, the Policy would need to more clearly reflect the core tenets of arbitration, such as party autonomy, the appointment of arbitrators and the finality of arbitral awards. In conclusion, while the Policy’s intention to introduce a small claims arbitration framework is an innovative approach to resolving lower-value disputes, it fails to fully embrace the principles that make arbitration dis - tinct from court-based procedures. The lack of par - ties’ agreement, the involvement of judges rather than arbitrators, and the inclusion of an appeal process all suggest that the proposed system is more of a court- like procedure rather than a true arbitration process. To align more closely with the principles of arbitration, the Policy would need to better incorporate the flex - ibility, party autonomy and finality that define arbitra - tion as a dispute resolution mechanism. Judicial oversight and expedited handling of arbitral proceedings The Policy underscores the vital role of the judiciary in ensuring the swift and efficient handling of arbitration and ADR-related matters. It encourages the heads of the courts across the federation to comply with direc -
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