Nigeria: A Dispute Resolution Overview

The Nigerian Pro-Arbitration Legal Regime: A Review of Recent Supreme Court Trends in Arbitration Enforcement in Nigeria

Introduction

Globally, arbitration stands out as one of the most reliable and respected tools for resolving disputes, and in many jurisdictions, it continues to gain ground. Its prominence over the years stems from a significant rise in cross-border and/or complex commercial transactions on the one hand and the need for a robust and fast-paced dispute resolution mechanism to meet commercial realities on the other. In Nigeria, this development led to the enactment of the Arbitration and Mediation Act 2023, which repealed the Arbitration and Conciliation Act 1988 and which provides a revised framework for the resolution of disputes. Over the years, the Nigerian courts have shown significant pro-arbitration sentiments and have consistently leant towards recognising and enforcing arbitration agreements and awards. This aligns with international best practices and Nigeria’s drive to establish itself as a leading arbitration centre and competitive commercial jurisdiction in Africa and worldwide. It is against this backdrop that this article examines some recent decisions of the Nigerian Supreme Court to demonstrate the attitude of the courts in Nigeria towards recognising and enforcing arbitration agreements and awards.

Laws applicable to arbitration in Nigeria

The principal legislation governing arbitration proceedings as well as the recognition and enforcement of arbitral awards in Nigeria, is the Arbitration and Mediation Act 2023 (AMA or the “Act”). Under the AMA, both domestic and foreign arbitral awards are fully recognised and enforced by Nigerian courts. Section 57 of the Act specifically provides for the recognition and enforcement of domestic awards, while Section 60 governs the enforcement of foreign arbitral awards in line with international best practices.

In addition to the AMA, other legislation regulating the recognition and enforcement of arbitral awards in Nigeria includes the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, which Nigeria has ratified and domesticated, as well as the various state arbitration laws and the rules of court that prescribe procedural requirements for recognition and enforcement applications before the Nigerian courts.

Notable decisions of the Supreme Court on upholding arbitral awards

Very recently, in Pan Ocean Oil Corporation (Nigeria) Ltd v KCA DD GMBH (2025) 14 NWLR (Pt 2006) 403, the Supreme Court affirmed that a party would not be permitted to exploit technicalities or mischief to frustrate the recognition and enforcement of an arbitral award. In this case, a consent award was under challenge and the court affirmed that it stood “guard against litigants exploiting procedural technicalities to evade obligations”. Furthermore, the court stated that it would uphold arbitral awards to preserve Nigeria’s credibility as a pro-arbitration jurisdiction and to promote alternative dispute resolution.

Similarly, in NICON Ins Ltd v Brighthouse Est Ltd (2025) 8 NWLR (Pt 1993) 469, the Supreme Court upheld the validity of an arbitral award made pursuant to an arbitration clause contained in the parties’ agreement, despite protest from the appellant that the arbitrator was guilty of misconduct, and that the arbitral tribunal’s jurisdiction was prematurely invoked. The court found that the arbitration clause in the agreement was properly triggered and no sufficient, cogent and credible evidence was led to show any misconduct on the part of the sole arbitrator.

In Sembcorp Eng Pte Ltd v IPCO (WA) Holdings Ltd (2024) 17 NWLR (Pt 1968) 531, the Nigerian Supreme Court affirmed the Court of Appeal’s reversal of a decision of the High Court which had wrongly entered final judgment in respect of a claim which should have first been referred to arbitration, pursuant to an arbitration clause in the parties’ contract. The court emphasised that arbitration agreements must be treated with sanctity while noting that their hallmark is the speedy and efficient resolution of disputes.

In NNPC v Fung Tai Eng Co Ltd (2023) 15 NWLR (Pt 1906) 117, the Supreme Court held that it would not sit on appeal over an arbitral award made by an arbitral tribunal arising from the mutual agreement of parties to submit their disputes to arbitration and be bound by its award. The court deprecated the attitude of the parties and legal practitioners looking “for every and any flimsy pretext to question sound arbitral awards simply because [they] did not favour them”. Though the court recognised the limited circumstances under which an arbitral award may be challenged, the court held that an arbitral award is “effectual, complete, conclusive, final and binding on the parties”.

In Metroline v Dikko (2021) 2 NWLR (Pt 1761) 422, parties to a joint venture agreement had agreed that their disputes be referred to a sole arbitrator appointed by the FCT chief judge. After an unfavourable award, the appellants sought to set it aside, arguing it bound a non-signatory. Both the High Court and Court of Appeal upheld the award. Affirming their decisions, the Supreme Court reiterated that arbitration is consensual and that courts must enforce arbitral awards except in clear cases of invalidity. It condemned the growing trend of frivolous challenges aimed at frustrating arbitration, stressing that respecting arbitration agreements, especially those with international elements, is essential to maintaining an effective and credible dispute resolution system.

Analysis of the Supreme Court’s approach to arbitration

From the above authorities, there is a clear and coherent judicial philosophy aimed at reinforcing arbitration as a dependable, autonomous and final dispute resolution mechanism within Nigeria’s legal framework. The themes that emerge from a review of the recent decisions emanating from Nigeria’s apex and policy-making court include:

Judicial deference to party autonomy

This thematic thread cuts across all the decisions of the Supreme Court identified in this article. Clearly, the Supreme Court and indeed all Nigerian courts respect and recognise party autonomy, which is the foundation upon which arbitration lies. The courts prioritise the parties’ contractual agreement to arbitrate, treating such clauses as binding commitments rather than optional pathways.

Restrictive interpretation of grounds for challenging awards

The court will not tamper with an arbitral award for a flimsy reason unrecognised by the AMA. The courts have adopted a narrow and disciplined approach to challenges against arbitral awards, both in seeking to set them aside and refusing to recognise them. This approach protects the finality of the arbitration process and discourages tactical litigation aimed at delay.

Protection of the integrity and finality of arbitral awards

The Supreme Court has repeatedly affirmed that arbitral awards are final and binding, and this demonstrates the court’s commitment to preserving the authority of arbitral tribunals. The court, particularly in the Fung Tai case, strongly condemned efforts to relitigate matters already resolved by arbitration.

Enforcement-friendly posture

The court recognises the importance of upholding arbitral awards to protect Nigeria’s global reputation as a pro-arbitration jurisdiction. This reflects a policy-driven understanding that reliable enforcement mechanisms enhance the attractiveness of Nigeria as a commercial and investment centre.

Rejection of judicial overreach

In the Sembcorp case, the Supreme Court was quick to rebuke and correct the High Court’s assumption of jurisdiction and delivery of final judgment where an arbitration clause clearly applied. The courts are not to undermine the arbitration process.

Alignment with international best practices

Across the board, the decisions are consistent with the principles set out by UNCITRAL, and global arbitration norms. This alignment strengthens Nigeria’s ambition to develop into a regional arbitration hub.

Conclusion

One of the purposes of the establishment of the 2024 National Arbitration Policy by the Government of Nigeria was to encourage a judicial culture that supports arbitration. The Supreme Court, being the apex court in Nigeria and the court of last resort, has, through its decisions in recent times, shown its attitudinal disposition towards upholding party autonomy in choosing arbitration as a dispute resolution mechanism in an agreement and enforcing the arbitral award that arises from such an agreement. This disposition arguably demonstrates the receptiveness and pro-arbitration stance of the Nigerian judiciary towards arbitration agreements and arbitral awards.