NIGERIA: An Introduction to Dispute Resolution

Introduction

Dispute resolution in Nigeria has evolved over the years but its core structure has remained traditional for decades. As one of Africa’s largest economies and a hub for commercial activities, Nigeria has witnessed a surge in complex disputes across various sectors. Additionally, as the country’s democracy continues to advance, disputes have emerged regarding its federalism and the powers of the various levels of government. It is in this background that this article highlights the current position, trends and developments regarding dispute resolution in Nigeria.

Dispute Resolution Methods

Litigation and arbitration remain the major forms of dispute resolution in Nigeria. Parties continue to adopt arbitration as the preferred dispute resolution method in contracts and other commercial transactions but often resort to litigation where there is no arbitration agreement between the parties or the issue is not arbitrable.

Generally, the popularity of alternate dispute resolution mechanisms continues to grow as Nigerian courts sometimes direct parties to explore mediation before hearing civil matters. However, many such mediation proceedings typically fail and parties return to court for the full litigation of the matter.

Interim Measures Pending Arbitration

Under Section 19 of the Arbitration and Mediation Act, 2023, Nigerian courts are empowered to issue and enforce orders to preserve assets or status; prevent the destruction or alteration of critical evidence; or issue such other injunctions to restrain actions such as breaching agreements or commencing parallel litigation.

An application for interim measures may be made to the court before the constitution of the arbitral tribunal or during the arbitral proceedings. This tool has proved useful as there is an increasing trend of parties making applications for these measures where they reasonably believe that the subject-matter or the proper conduct of the arbitration proceedings is at risk.

Resolution of Disputes Between Governments

The courts remain the major avenue for the resolution of intra-government and inter-governments disputes in Nigeria and have made pronouncements to streamline the application of law in certain matters of national importance in the past year.

In Attorney General of Lagos State v Attorney General of the Federation & Ors (unreported with case number SC/01/2008), the Supreme Court of Nigeria held that “lottery” is a matter which the National Assembly lacks the power to legislate over. This was following a dispute between the federal government and the states of the federation regarding the regulation of the now booming lottery and gaming industry in Nigeria. The Court’s decision has limited the legislative and regulatory powers of the federal National Assembly in relation to lottery to the Federal Capital Territory, indicating that operators within that industry must obtain individual licences from the government of the various states of the federation that they operate in.

In another matter, Attorney General of the Federation v Attorney General of Abia State & 35 Ors (unreported with case number SC/343/2024), the Supreme Court held that local governments are entitled to receive their fiscal allocations from the federal government directly. State governments had argued that funds allocated to the local governments for undertaking projects must be received by the state governments and passed on to the various local government authorities within the states. The federal government argued that it was unconstitutional for state governments to withhold funds allocated to local governments from the federation account. The Supreme Court’s decision is a definite end to the dispute that has lingered between the different levels of government for more than two decades.

Improved Procedural Rules

To streamline the dispensation of justice, the Supreme Court Rules 2024 (the “New Rules”) were issued to replace the 1985 Rules that outlined the procedures to be adopted by the court in entertaining disputes. The New Rules introduced several new innovations and advancements, some of which have been discussed below.

The New Rules have recognised electronic filing as an official means of commencing litigation process at the Supreme Court. The meaning of records (of appeal) has been expanded under Order 1 Rule 3 and Order 6 Rule 2(2)(d) to include electronic devices/copies as well as paper documents. The Rules provide for an electronic version of the Supreme Court’s seal and direct for the creation of electronic copies of received processes/documents by the Registrar. Notice of appeal in a civil matter can now be filed electronically and service of court processes and notification of court sittings through electronic means including electronic mail and mobile telephone numbers. An electronic unit within the court’s registry has also been established to allow for the continuous filing of documents electronically. It is expected that this advancement will continue as the Chief Justice of Nigeria is to set a date from which electronic filing through a new case management system will be the only acceptable mode of filing.

Following a change to the definition of “appeal” under Order 1 Rule 3 of the New Rules to mean “entry of appeal after record of appeal has been transmitted from the court below”, it appears that applications for leave to appeal may not be considered as valid and pending appeals. This implies that a party can no longer seek stay of execution, stay of proceedings or an injunction pending appeal on such applications.

Applications for extension of time to appeal or leave to appeal must now be accompanied by the certified true copy of the decision of the lower court, the order of refusal and a written address in support of the application which must be made within 21 days of the refusal by the Court of Appeal. This requirement is expected to ensure that appeals are not delayed by the unreadiness of the parties. Also, per Order 4 Rule 15 of the Rules, the time for filing of any process is automatically extended upon the first expiration and thereafter, it may be extended upon payment of default fees. No further extensions will be granted after the second time. This is to curtail the spate of frivolous appeals or appeals by indolent partis who have no intentions of diligently prosecuting same.

The New Rules also impose certain responsibilities on legal practitioners to improve the litigation process and reduce delays. These include the requirement under Order 3 Rule 3 that any legal practitioner who no longer represents a client informs the registrar within seven days after service of any process that they no longer act for that client. To ensure compliance, failure to notify the registrar in such circumstances attracts an order to pay any costs occasioned thereby and will be considered an act of professional misconduct.

Lastly, the New Rules have established the minimum amounts that may be awarded in specific cases as costs to indemnify a successful party. These costs include costs for delaying the hearing of a civil appeal or an application in a civil appeal and may be awarded personally against counsel representing the parties.

Conclusion

The trends discussed above highlight a gradual alignment with global best practices in dispute resolution while addressing local challenges. They have significant implications as they indicate a step to make the litigation process more efficient by adopting new technology, reducing delays and encouraging alternative dispute resolution methods. It is expected that these robust innovations deployed by the judicial system will be useful in resolving criminal and civil disputes, including inter-government claims.