Arbitration or court? Choosing how to resolve a commercial dispute in Nigeria

When a business relationship breaks down, many people assume the next step is court. In Nigeria, as elsewhere, that is only one option. Arbitration and mediation can resolve commercial disputes privately, often faster, and with more control over the process and the outcome.

How the options differ

• Litigation: a judge decides the dispute in public proceedings, following court rules and timetables, with rights of appeal.
• Arbitration: the parties appoint one or more arbitrators who decide the dispute privately. The award is binding and can be enforced through the courts.
• Mediation: a neutral mediator helps the parties negotiate their own settlement. Nothing is imposed; if a settlement is reached, it can be recorded and made binding.

The legal framework

The Arbitration and Mediation Act 2023 replaced the Arbitration and Conciliation Act and modernised the law on both arbitration and mediation in Nigeria. Courts also encourage settlement: the Lagos State and Oyo State Multi-Door Courthouses, for example, offer court-connected mediation and arbitration.

When arbitration or mediation may suit you

• The contract already contains an arbitration or mediation clause.
• Confidentiality matters, for example to protect a reputation or a commercial relationship.
• The dispute is technical, such as construction or banking, and would benefit from a decision-maker with relevant expertise.
• The parties want to continue doing business together.
• One party is outside Nigeria and an enforceable, neutral process is important.

Before you decide

Check your contract for a dispute resolution clause, gather the key documents and correspondence, and take advice early. The right route depends on the amount at stake, the strength of the evidence, the urgency, and what outcome you need.

First Bethel Solicitors acts both as counsel to parties and as arbitrators and mediators. Contact us to discuss your options.

The information on this website is for general information only and is not legal advice. Contacting us through this website does not create a lawyer–client relationship. Please do not send confidential information until we have agreed to act for you.