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On the 26th of May 2023, the erstwhile President of the Federal Republic of Nigeria, Muhammadu Buhari, signed into law the Arbitration and Mediation Act, 2023 (“Act” or “AMA”). The Act repealed the Arbitration and Conciliation Act, CAP A18, Laws of the Federation of Nigeria 2004, which had been in force for approximately 35 years.

This new Act is made up of 91 sections (as opposed to the 58 sections in the 2004 Act) and is divided into three Parts and three Schedules. Part 1 deals with Arbitration, Part 2 provides guidelines for the conduct of Mediation in Nigeria, and Part 3 caters to Miscellaneous Provisions.

It has been said that the Act is set to revolutionise Nigeria’s Arbitration and alternative dispute resolution landscape, as it provides a unified legal framework for the fair and efficient settlement of commercial disputes through Arbitration and Mediation.

The innovations introduced by the Act include the following:

  1. The validity of electronic communication of Arbitration agreements: As a general rule, the prescribed form of an Arbitration agreement is that it may be in the form of a clause in a contract or a separate complete agreement in writing. By the introduction of section 2(4), the Act expands the scope of what can be a valid agreement in writing. Thus, Section 2(4) of the Act provides that the requirement for an Arbitration Agreement to be in writing is met where it is by electronic communication and the information contained therein is accessible and usable for a subsequent reference.

For the avoidance of doubt, electronic communication is further defined by the Act as any communication that parties make by means of data messages, that is any information generated, sent, received or stored by electronic, magnetic, optical or similar means including electronic data interchange (EDI), electronic mail, telegram, telex or telecopy.[1]

The introduction of Section 2(4) thus takes into consideration digital practices like the exchange of emails that lead to the formation of numerous arbitration agreements between individuals and corporate entities and thus validates such electronic communications as an arbitration agreement properly so called within the meaning of the Act.

  1. Power of an Arbitral Tribunal to grant Interim measures pending the determination of a dispute:

Under the old regime, parties are often seen seeking interim reliefs from the court in spite of an express binding arbitration agreement between them. This has led to the elongation of time originally envisaged for the determination of disputes.

 Section 20 of the Act now provides that unless otherwise agreed by the parties, an arbitral tribunal may grant interim measures such as temporary measures to maintain or restore the status quo, prevent an action likely to harm or prejudice the arbitral process, preserve the assets by which an arbitral award may be satisfied pending the determination of disputes, amongst others.

 The grant of the powers to grant interim measures to an arbitral tribunal similar to the powers of the court is an attempt by the draftsmen to decongest Nigerian courts and reduce the unnecessary delays encountered by parties who have hitherto agreed to arbitration to enjoy the benefit of the speedy resolution of disputes. It is even more laudable that the Act  provides for the recognition and enforcement of the interim measures granted by an arbitral tribunal by the courts, thus cementing the authority of the tribunal.

  1. The introduction of the Award Review Tribunal: The Award Review Tribunal is perhaps the most notable provision in the Act, described by some practitioners as alien to Arbitration practice around the world.

In Section 56(1), the Act provides that parties may provide in their Arbitration Agreement that an application to review an Arbitral Award shall be made to the Award Review Tribunal (ART). This review is, however, subject to specific grounds set out in Section 55(3) of the Act, which speaks to matters like the legal incapacity of a party to the Arbitration Agreement, improper notice of the appointment of an Arbitrator to a party , composition of the arbitration tribunal or arbitration procedure not in accordance with the agreement of parties, where award contains decisions on matters beyond the scope of the Arbitration and so on. Also, where an Arbitral Award is submitted for review, the Act provides that the ART shall render its decision within 60 days from the date of its constitution.

The introduction of the ART is an attempt to address the challenge of undue delays suffered by parties in Nigerian courts in a bid to set aside an Arbitral Award. The draftsmen of the Act understood the peculiarities of the Nigerian judicial environment, and thus made an attempt to eliminate the practice of parties rushing to court to apply to set aside a binding award as a guise for refusal to comply with a binding award. There are, however, criticisms that the problem of delays in the courts in relation to arbitration proceedings have not yet been addressed as the decision of the ART can still be appealed in court. While it is plausible that the problem of delay may not have been resolved as intended by the draftsmen, especially because the right of appeal to the court is a constitutional right, and an attempt to circumvent that right by the Act will render the Act void to the extent of its inconsistencies with the Constitution of the Federal Republic of Nigeria [2], it can be argued that subjecting an Arbitral Award to the ART deters the haste with which lawyers rush to courts to set aside an award. When parties understand that there are steps that can be taken to quickly review an award in the event where there is doubt as to the conduct of the first process, they will be more willing to first take advantage of it.

  1. Reduction in the number of default arbitrators: Prior to the Act, where the parties to an arbitration dispute failed to agree on the number of Arbitrators that should preside over their dispute, the position of the law was that a default number of three Arbitrators would preside over the dispute, and this put a huge burden of Arbitral fees on commercial disputes, especially for disputes with small monetary claims.

 In Section 6(2), the Act reduced the number of default Arbitrators by providing that where there is no agreement as to the number of Arbitrators, the Tribunal will have a sole Arbitrator. This provision thus lifts the burden of excessive fees from parties to an arbitration.

  1. Expansion of Limitation of time in Arbitral proceedings: Under the old regime, as seen in the case of City Engineering Nig. Ltd. v. Federal Housing Authority[3], the statutory period of limitation for the enforcement of arbitral awards begins to run from the date of the accrual of the cause of action and terminates six years after. This position created a lot of hardship in that, after the grant of an award, there are applications to set aside the award, which run from the lower court to the higher courts, which usually renders it incapable of enforcing a binding award within the statutory period of six years.

In Section 34, the Act provides that statutes of limitation shall apply to arbitral proceedings as they apply to judicial proceedings and further provides expressly that in computing the limitation time for the enforcement of arbitral awards, the periods between the commencement of the arbitration and the award shall be excluded.

By this, the Act has cured the previous hardship by eliminating the six-year limitation. The implication of this section is that in determining the statutory period of limitation for matters stemming from arbitral proceedings, the court and parties would first ascertain the subject matter of dispute and apply the period of limitation provided by law for that subject matter; however, the application of the general statutory limitation law is limited to the extent that rather than compute from the date the cause of action accrued as with matters arising from judicial proceedings, the computation begins from the date of the award for matters stemming from arbitral proceeding. [4]

  1. Legitimisation of Third-party funding of arbitral proceedings: Under the old regime, it was deemed an offense for a third party to fund an arbitral proceeding and litigation generally as a result of the common law doctrines of champerty and maintenance[5], which are applicable in Nigeria by virtue of received English law.

In Section 61, the Act abolishes the torts of champerty and maintenance in arbitral proceedings and arbitration-related proceedings in courts in Nigeria and provides for third party funding. While section 62 further provides that where there is a third-party funding agreement, full disclosure of the third-party funder shall be made to other parties and the tribunal or court, with provision of security as to cost.

The Act’s express abolition of the torts of champerty and maintenance in arbitral proceedings prevents  abuse of the established arbitral system and  discourages unscrupulous individuals from interfering in disputes for personal gain. [6]

  1. Establishment of Arbitral Proceedings Rules: The Act provides the Arbitral Proceedings Rules in its third Schedule, to cater to the procedure for bringing applications arising from arbitral proceedings to the high court, similar to the established rules of court.

It is noteworthy that the Arbitral Proceedings Rules will only come into play in states where there are no existing high court rules as the constitutional power to make rules guiding applications to the courts are vested in the courts.[7] What would have been much appreciated would have been arbitration proceeding rules that cater to the conduct of arbitral proceedings in themselves, addressing issues such as  the period within which to file a statement and submit evidence to the tribunal, which is presently left to the judgement of parties.

  1. Abolishment of Conciliation and promotion of Mediation as a means of alternative dispute resolution: The Act, unlike its predecessor, fails to provide for conciliation as a means of alternative dispute resolution.

Other innovations in the Act include the appointment of emergency arbitrators, consolidation of arbitration claims, permission for joinder of parties, immunity of arbitrators, arbitral tribunals, and arbitral institutions, to mention a few.


The innovations in the Act show the efforts of the draftsmen in seeking to ensure that the pitfalls of the old law are adequately rectified. The Act is a commendable piece of legislation, and we hope to see its smooth application in the coming weeks.

[1] Section 91 of the AMA, 2023

[2] See Section 1(3) of the Constitution of the Federal Republic of Nigeria (1999), as amended.

[3] (1997) 9 NWLR (Part 520) 224

[4] State statutes of limitations dictate the time frame for actions, with some specific periods applicable to simple contracts (six years), negligence damages (three years), state land recovery (20 years in Lagos and 12 years in Abuja), and individual land recovery (12 years). (See Sections 7, 8, and 15 of the Limitation Act, Abuja, and Sections 8(1)(a), 9, and 16 of the Limitation Law, Lagos.)

[5] Where a person agrees to maintain a suit in which he has no interest, the proceeding is known as Maintenance; and where he bargains for a share of the result to be ultimately decreed in a suit in consideration of assisting in its Maintenance, it is known as Champerty and was considered a tortious act under common law . For further reading on the law of champerty and maintenance  see: https://blog.ipleaders.in/maintenancechampertytorts/#:~:text=If%20a%20person%20agrees%20to,Maintenance%2C%20it%20is%20styled%20Champerty accessed on 6/9/2023.

[6] Section 91 of the AMA, 2023, defines the meaning of third-party funder, and what a third-party funding agreement should contain.

[7] See Section 6 of the Constitution of the Federal Republic of Nigeria


Author : Nenewa Godwin – Associate, Lexworth Legal Partners


This document is intended only as a general discussion on the subject of this article. Please do not regard it as legal advice. We would be delighted to provide additional details or advice about specific queries, if required.

For further enquiries, kindly send an email to n.godwin@lexworthlegal.com or info@lexworthlegal.com.