MCIArb. (UK)*



 May I express my sincere appreciation to the Chairman and members of the Conference Planning Committee (CPC) and the sponsors of this session for giving me an opportunity to serve as one of the resource persons and/or speakers.

Although the notice given to me to present the paper is short, I have been able to come up with this presentation. I strongly believe that this forum is an interactive session for all of us to exchange ideas. The only difference is that while I have a written discussion, the audience contributes orally.

As can be seen infra, this presentation is divided into the following sub-topics, namely:

1.                Introduction;

2.                Meaning of “ADR”;

3.                “Arbitration” defined;                                                 

4.                Inception of Arbitration in Nigeria;

5.                Progress made so far towards the Development and

Practice of ADR and Arbitration in Nigeria;

6.                  Prospects/Advantages of ADR and Arbitration;

7.                Problems of ADR and Arbitration in Nigeria;

8.                Summary and Conclusion; and

9.                Bibliography.

2.      MEANING OF “ADR”:

A very senior colleague (name withheld for obvious reasons) met me shortly before I wrote this presentation and asked me the following two questions at the same time:

“a.    I have seen the topic assigned to

you for discussion. Why is it on ADR and


b.               Is Arbitration not part of ADR?”

In addition to the answer I gave to my learned colleague I humbly requested him to attend this session.  I only hope that he is here presently.                                                                 

Although the acronym “ADR” and the word “ARBITRATION” are known to many of us, it will still not be out of place to briefly define, explain and/or discuss same in view also of my interaction with my learned colleague as indicated above.                                                                          

Alternative Dispute Resolution (“ADR”) simply refers to any means of dispute resolution outside litigation in a Courtroom.  It is a form of facilitated settlement, which is confidential and without prejudice.  Consequently, the details of the process need not usually be disclosed to the court. If agreement is reached, a binding settlement agreement can be entered into. If it is not, the fact that ADR has taken place but failed can be disclosed to the Court, but usually not the reasons for the failure.  The main feature of this system of dispute resolution is the absence of an imposed sanction as the mediator decides nothing and awards nothing.  He merely assists the parties to arrive at a settlement.  Thus, while the mediator controls the process, the parties control the outcome

“ADR” has also been defined by Black’s law dictionary Sixth Edition at page 78 as:                                              

“…procedure for settling disputes by means

 other than litigation; e.g. by Arbitration, Mediation, Mini-trials. Such procedure     

which are usually less costly and more expeditious, are increasingly being used in Commercial and Labor disputes, divorce actions, in resolving motor vehicle and medical malpractice tort claims, and in other disputes that would likely otherwise involve court litigation”

While ADR is a supplement to litigation, it has been argued that the “A” in the acronym fits more as “Appropriate Dispute Resolution “and not Alternative Dispute Resolution. A school of thought sees same as “Preferred Dispute Resolution”. Regardless of the name assigned to this form of dispute resolution, however, diverse schemes of ADR abound among which are; Mediation, Early neutral evaluation, Med-Arb, Negotiation, Facilitation, Mini-trial or Executive Tribunal, Factfinding, Conciliation etc and each has its own characteristic features. Although they all have many things in common as opposed to litigation, from available data, the two most common forms of ADR are Arbitration and Mediation.  While in some countries, including Nigeria, Zambia etc, Arbitration is the leading form of ADR, Mediation is the arrow head in some other countries.                                                                             


Arbitration is a process of Alternative Dispute Resolution (“ADR”) in which a neutral third party (Arbitrator) renders a decision after a hearing at which both parties have an opportunity to be heard.  Where Arbitration is voluntary, the disputing parties select the Arbitrators who have the power to render a binding decision.  A person who resolves disputes by Arbitration is called an “Arbitrator” or a “Neutral”.  Thus, arbitration is a simplified version of a trial involving no discovery (except in special circumstances) but simplified Rules of Evidence.  Generally the parties decide how the arbitrators will be appointed and if they fail, there is usually a default provision in the law or arbitral rules.  Thus it can be a sole arbitrator or a tribunal of three arbitrators.  In the case of a sole arbitrator, the appointment is jointly made by the parties and if they fail, the court, a third party or an appointing authority, as the case may be, does the appointment.  Where there are three arbitrators, each party will appoint one arbitrator each and the two so appointed will appoint the third who usually acts as the Chairman or the presiding Arbitrator.  It is noteworthy that whether one or two or more arbitrators, they are called arbitral tribunal. All these are determined by the applicable law and arbitral rules.                                                                                                       

The important point to note therefore is that the arbitrator is in the status of a Quasi-Judge. After hearing presentations including evidence, from the parties or their legal representatives, the Arbitrator makes a decision, which is called an Award and which is binding on the parties.  The      courts would therefore enforce any award made by an  arbitrator.

From the above definitions or descriptions of ‘ADR’ and “Arbitration”, it can be observed that there is some sort of incongruity in the definitions. On the one hand, one school of thought has it that since Arbitration has a lot in common with litigation, it can not be properly referred to as a form of ADR since all other forms of ADR (in contradistinction to Arbitration)

have more in common than with Arbitration. On the other hand, the second school of thought posits that since Arbitration is not litigation and that the duo have many dissimilarities, Arbitration is more of an ADR mechanism than litigation and as such, Arbitration is a form of ADR.                                      

 However, the distinction is academic and not of much relevance as far as our topic for discussion is concerned. That notwithstanding, reference is made to the two schools of thought because of the way and manner the topic assigned to me has been couched i.e. Development and Practice of “ADR” and “Arbitration” in Nigeria.                                                                                                                


Although I couched this sub-topic – INCEPTION OF ADR AND ARBITRATION IN NIGERIA-, this is most misleading. I say this because it gives the impression that Arbitration and ADR probably started only recently in Nigeria, and a fortiori in other African countries. This impression is very erroneous if we remember and acknowledge the existence of customary Arbitration which was defined by the Supreme Court of Nigeria in the case of Ohiaeri vs. Akabeze (1992) 2NWLR (Pt 221) Pg 1 at 7 Paras 12 as:

An arbitration in dispute founded on the voluntary submission of the parties to the decision of the arbitrators who are either the chiefs or elders of their community, and the agreement to be bound by such decision or freedom to resile where unfavourable.”                                                                                                                                

See also the case of Eke vs. Okwaranyia (2001) 12 NWLR (PT 726) Page 181 at 184 where the above definition of customary Arbitration was adopted by the trial court.  Thus, arbitration is not alien to customary jurisprudence: Okpuruwu v Okpokam (1988) 4 NWLR (pt 90) 554 at 572.  Indeed, in land matters, arbitration was used to settle disputes relating to land. In Larbi v Kwasi (1952) 13 WACA 76, the Privy Council held that a customary arbitration was valid and binding and that it was repugnant to good sense for a losing party to reject the decision of the arbitrator to which he had previously agreed. Similarly in Mensah v Takyiampong & Ors (1940) 6 WACA 118, the West African Court of Appeal held, inter alia, that:

… in customary arbitration, when a decision is made, it is binding upon the parties, as such decisions upon arbitration in accordance with native law and custom have always been that the unsuccessful party is barred from reopening the question decided and that if he tries to do so in the Courts, the decision may be successfully pleaded by way of estoppels.

One distinguishing feature of customary arbitration is that it is usually oral. This takes it      outside the ambit of statutory arbitration. From a long line of decided cases it is obvious that arbitration is not alien to customary jurisprudence.  This principle was stated in the following cases:  Ofomata & Ors v Anoka & Ors (1974) 4 EC.S.L.R 251; Assampong v Amuaku (1932) 1 WACA 192, Inyang & Ors v Essien & Ors (1957) 2 F.S.C. 39, and Foli v Akese (1930) 1 WACA 1.

Accordingly, Arbitration had been with us from time immemorial. This is because conflicts and controversies are normal occurrences in the daily life of the society. This is primarily a result of the different interests of persons in communal matters, personal claims, family affairs, labour relations, property interests, neighborhood relationships and activities of the Government, inter alia. To manage these conflicts and controversies, which ultimately result in disputes, the law of the land recognizes the rights of individuals, groups and the Government to go to Court. See Sections 6 and 36 of the 1999 Constitution of the Federal Republic of Nigeria.

However, failure of the Court system (which is adversarial in Nigeria), has led to the growing search for ALTERNATIVES to it (i.e. litigation). This fact is a major factor for the growth of Arbitration and ADR globally. But the pertinent question here is when did Arbitration and ADR begin in Nigeria?                                                                                                                              

From the above, it is obvious that customary Arbitration and ADR had been in existence in this part of the world long before the advent of the colonialists and colonialism and they are both still in existence.  Indeed, we see the advent of ADR as a re-statement of customary jurisprudence. This is so because the focus of ADR – interests and needs of the parties – is the focus of customary jurisprudence.

The primary sources of the Nigerian law of Arbitration are the English Common Law, the Nigerian Customary Law and Nigerian Statutes.  The Local Enactments on Arbitration and ADR in Nigeria incorporated the English Common Law, Doctrine of Equity, together with the English Statutes of general application, into the country during the period of the Colonial Administration of the country. Consequently, English Common Law rules on Arbitration are part of our Law. However, the Arbitration Ordinance, Ordinance 16 of 1914 which was an adaptation of the 1889 English Arbitration Act, was the first legislative enactment on Arbitration in Nigeria.  This was later re-enacted as Arbitration Act, Cap 13, Laws of the Federation of Nigeria, 1958.  It will also be recalled that Nigeria was a unitary state till 1954. 

At the time of political independence in 1960, the Arbitration Act was applicable to Lagos, the then federal capital territory while the Regions (now States) had their Arbitration Laws.  These are found in the Arbitration Law of Northern Nigeria 1963, Arbitration Law of Western Nigeria 1959 and Arbitration Law of Eastern Nigeria 1963. States that were eventually created out of these older ones adopted the laws applicable to their states.

This was the position until in 1988 when the Federal Government of Nigeria adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration vide the promulgation of the Arbitration and Conciliation Decree No. 11 of 1988.  In 1990, it became the Arbitration and Conciliation Act Cap 19 Vol.1 Laws of the Federation of Nigeria, 1990.  Today, this Act regulates arbitrations arising from written and voluntary agreements to arbitrate. It is also noteworthy that all High Court (Civil Procedure) Rules have provisions on reference to arbitration while some statutes provide for statutory arbitration.  Thus arbitration can arise voluntarily as provided for in the Arbitration and Conciliation Act, by order of court as provided in the Rules of Court and by statutes as found in the Trade Disputes Act, Cap 432, Laws of the Federation of Nigeria, 1990, the Nigerian Investment Promotion Council Act of 1995, and the Privatization and Commercialization Act of 1999. Indeed the Nigerian Communications Act of 2003 provide for arbitration.                                                                                                                

Some people have argued that Common Law and the Doctrine of Equity are sources of Arbitration Law in Nigeria. In consequence, recourse is made to the common law and Doctrine of Equity to fill in the “blank spaces”.  The current English statute on Arbitration is the Arbitration Act of 1996.  It must be stated that this statute is not applicable in Nigeria since section 58 of the Arbitration and Conciliation Act provides that it shall apply to all arbitrations in Nigeria

One major feature of the Arbitration and Conciliation Act is that it covers both arbitration and conciliation. Similarly, the three Schedules to the Act deal with Arbitration Rules, Conciliation Rules and the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.


The main arbitration law is the Arbitration and Conciliation Act.  It borrows heavily from the UNCITRAL Model Law of International Commercial Arbitration which was adopted by the United Nations General Assembly in 1985 and the Arbitration Act of 1914 that it replaced.                          

The awareness to arbitrate, mediate or negotiate or adopt any other ADR mechanism in the resolution of disputes in Nigeria is waxing stronger and stronger on the passage of each day. Most Agreements in commerce today have a clause referring parties to arbitrate or mediate.

Similarly, parties can by consent agree to adopt  ADR even if such a clause is lacking in an agreement. A healthy development today in Nigeria in the realm of ADR is the sudden upsurge of Arbitrating or Arbitral bodies and ADR centers. As of today, we have in existence among others, the following Arbitration bodies in Nigeria:-

(1)            The Nigerian Branch of The Chartered Institute of Arbitrators (UK);

(2)            The Chartered Institute of Arbitrators (Nigeria);

(3)            The Institute of Dispute Resolution, Ekpan in Delta State;

(4)            Negotiation and Conflict Management Group (NCMG); and            

(5)            Abuja Arbitration Forum (although this is still in its embryonic stage).                                                                                                                      

It may not be out of place to commend the good works being done by the NCMG which is more or less an NGO. It has so far championed the establishment of the Lagos Multi-Door Courthouse, The Abuja Multi-Door Courthouse and has the intention of duplicating such Courthouses in all other States of the Federation.  Of recent the NCMG was able to let us have a first hand Mediation course in both Lagos and Abuja by some Faculties from the Centre for Effective Dispute Resolution (CEDR) in London. The attendance at this International Course on Mediation was very rich. Members of the Bar and Bench are encouraged to give them a helping hand to embrace the scheme in the overall interest of the justice delivery system in Nigeria.

In addition to these Court connected ADR centers, there is also the Lagos Regional Centre for International Commercial Arbitration at No. 1 Alfred Rewane Road, Falomo, Ikoyi Lagos. This center has been there since 1989 and it caters for the whole

of the West African Sub-region. The centre was established under the Lagos Regional Centre for International Commercial Arbitration Act of 1999. It is to the advantage of parties that deal in trade, commerce and investment within the region covered by the said centre. Parties need not resort to Arbitration outside the region if the investment was made there or the place of performance is within the region. The rules of the centre were fashioned after the UNCITRAL Arbitration and Conciliation Rules and the centre also assists in the enforcement of Awards and other matters incidental or pursuant to same.                                                                                                                                               

There is also a number of other bodies that participate in encouraging the activities of Arbitration and ADR in Nigeria. They include our Bar Association, the various branches of chambers of Commerce, Industries, Mines and Agriculture, The Nigerian branch of International Chambers of Commerce etc. At the Nigerian Law School, ADR is now taught and in some Universities, Arbitration is taught.


Arbitration has been accepted globally and also practised in other African Countries as well as in Nigeria. Parties to a dispute now insert arbitration clauses in their agreements. 

Arbitration has done a lot of good in Nigeria in so many ways. The question which is often asked is;

why do parties, particularly in the business

 world, sometimes prefer arbitration to litigation

in the Ordinary Courts of the land?”                                                                        

The answer is that, Arbitration has a number of advantages over formal Litigation in the courts.  These include but not limited to the following:

a)                Arbitration Can be Quicker:

A Court action involves conformity with laid down procedure and rules which cannot be circumvented by the parties and this takes time.  Arbitration, on the other hand, does not have to follow any laid down procedure and rules.

b)      Arbitration Can be Less Expensive:      

If a dispute is of a technical nature and a technically qualified arbitrator is appointed, he can conduct the arbitration effectively and quickly without the involvement of lawyers.  This saves costs, particularly if the parties agree that the dispute is to be settled on documents, without a hearing. This is not possible with Litigation as one cannot replace a judge.

c)                Arbitration process permits some disputes to be resolved solely on documents, without hearing.  The procedure saves time and money. Parties can represent themselves in arbitral proceedings.  Other persons of their choice, who may or may not be lawyers, can alternatively represent them.  In contrast, non-lawyers have no right of audience in the Court of Law and representation there in is only by lawyers.

d)              A party to a contract may not wish to be exposed to the decision of a single individual, who must have his weaknesses, should a dispute arise out of the Contract.  The anxiety can be assuaged by stipulating for an arbitration tribunal of three persons, one of whom he appoints.

e)                 Arbitration is less formal than litigation, which takes place in the open court, before the whole world, so to say.  It can be made very informal and confidential, and the parties are thus much more relaxed in arbitral proceedings.              

f)                 Arbitration takes care of the convenience of the parties and their witnesses in fixing the date, time and place of hearing.

g)               Arbitration allows for the selection of experts to look into

disputes on matters in which they are proficient.

h)               Arbitration is conciliatory in nature and contrasts Litigation, which has the connotation of a battle between the litigants.  And at the end of the litigation, the relationship between the parties may never be cordial again.

i)                  In International commercial transactions, the parties may, ‘neutralize’ a dispute in order to prevent such a dispute from being handled by the regular Courts of their Countries.

It must however be pointed out that it is not in all cases that arbitration is faster and less expensive than litigation.  Some commercial Arbitrations can be more expensive and take longer time to conclude, than equivalent litigation.  This is particularly so when the “case stated procedure is employed”.                                                                                                                                                                             


          These include but are not limited to:-                                                                                                                            

a)      SCEPTICISM: Parties in disputes are sceptical of settlement of disputes outside courtroom and thereby not easily convinced to transfer matters to Arbitration.

b)               ORAL SUBMISSION:  Absence of written documents is likely to lead to a disagreement as to what the exact terms of the agreement are, it is relevant only in respect of existing disputes, whereas a written agreement can be in respect of present and future disputes.  Although under customary arbitration, arbitration can be oral, under the Arbitration and Conciliation Act, arbitration must be in writing.

c)      ENFORCEMENT:  The award of an arbitral tribunal is not a Judicial decision and so cannot be enforced as such.  If the guilty fails to implement the award, the successful party has to resort to judicial process in order to compel compliance, and this may take a considerable amount of time and money. However, if the arbitration is regulated by the Arbitration and Conciliation Act and its Arbitration Rules, the award can be enforced under summary and expeditious procedure set out in Section 31(3) of the Act.  See the case of RAS PAL GAZI CONSTRUCTION COMPANY LIMITED VS. FEDERAL CAPITAL DEVELOPMENT AUTHORITY (2001) 10 NWLR (Pt 722) Pg. 559 At 562 Para. 3 where the Supreme Court held inter alia, that:

“…An award made pursuant to Arbitration proceedings constitutes a final judgement on all matters referred to the arbitrator. It has a binding effect and it shall upon application in writing to the court, be enforced by the court…”

 Thus  the matter may be concluded rather quickly and cheaply.  Indeed, in the case of foreign arbitral award, it is usually easier to enforce an arbitral award than a court judgment especially in countries that have adopted the 1958 New York Convention and the 1985 UNCITRAL Model Law.                                                     


All ADR Practitioners accept the proposition that it is more beneficial for parties to resolve their differences by negotiated agreement rather than through contentious court proceedings.  It was a fundamental Precept of Roman law that it was in the interest of the State to see an end to litigation.  ADR is not limited to disputes involving relationships.  It is widely used for issues where there is no relationship between the parties.

Most Practitioners share the belief that parties using ADR processes tend to arrive at settlements that are more creative, satisfactory and longer lasting than those imposed by the Court.  However, ADR can be used simply to establish a deal that eludes the parties in bilateral negotiations, either personally or through their lawyers.                                

Accordingly, all hands must be on deck to continue to encourage the growth and further awareness of Arbitration and other forms of ADR. This is because of the numerous advantages, most of which have been outlined supra.              

In addition, the awareness can be further enhanced through attendance at symposia, conferences, seminars, courses and workshops both within and outside the country.

Once more, I thank the organizers of this Annual General Conference and the sponsors of this ADR session for the opportunity and privilege to serve.

I thank all of you for listening patiently and attentively.

May God bless you all.


1.                ADR Principles and Practice, Second Edition: Henry Brown and Arthur L. Marriott Q. C.

2.                Black’s Law Dictionary, Sixth Edition, Centennial Edition.

3.                Dispute Resolution Series ADR and Commercial Disputes Editor: Russell Caller.

4.                The Law of Arbitration in Nigeria by Gaius Ezejiofor

5.                Alternative Dispute Resolution (ADR) M. OZONNIA OJIELO, First Edition.

6.                Ohiaeri Vs. Akabeze (1992) 2 NWLR (Pt. 221) Pg 1 at 7 Para 12.

7.                Eke Vs. Okwaranyia (2001) 12 NWLR (Pt 726) Pg 181 at 184.

8.                Okpuruwu Vs. Okpocham (1988) 4NWLR (Pt 90) 554 at 572.

9.                Larbi Vs. Kwaji (1952) 13 WACA 76.

10.           Mensah Vs. Takyiampong & ORS (1940) 6 WACA 118.

11.           Ofomata & ORS Vs. Anoka & ORS (1974) 4 E.C.S. L-R 251

12.           Assampong Vs. Amnaku (1932) 1 WACA 192.

13.           Inyang & ORS Vs. Essien & ORS (1957) 2 F.S.C 39

14.           Foli Vs. Akese (1930) 1 WACA 1.

15.           Sections 6 and 36 of 1999 Constitution of the Federal Republic of Nigeria.

16.           Arbitration and Conciliation (ADR) Act Cap 19. LFN 1990.

17.           Cap 13, Laws of the Federation of Nigeria 1958.

18.           Cap 10, Laws of Eastern Nigeria, 1963; Cap 8 Laws of Western  Nigeria, 1959; Cap 7 Laws of Northern Nigeria, 1963.

19.           United Nations Commission on International Trade Law.

Ras Pal Gazi Const. Ltd. Vs. Federal Capital Development Authority (2001) 10 NWLR (Pt 722) Pg. 559 at 562 para. 3.