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Wed, Sep 13, 2023 10:05 PM

Nigeria Strengthens its Position as an Arbitration Hub with New Act

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Nigeria Strengthens its Position as an Arbitration Hub with New Act
Nigeria's recent repeal of the 1988 Arbitration and Conciliation Act and introduction of the 2023 Arbitration and Mediation Act have brought significant changes to the country's legislative framework, enhancing its position as an arbitration hub in Africa. This article explores the criticisms of the previous act and highlights notable changes introduced by the new act, including the option of an Award Review Tribunal, recognition of third party funding, and provisions for consolidation of proceedings.

Nigeria has taken a significant step towards solidifying its position as a key arbitration hub in Africa with the repeal of the 1988 Arbitration and Conciliation Act and the introduction of the new 2023 Arbitration and Mediation Act. This legislative change addresses several criticisms of the previous act and introduces important reforms to strengthen Nigeria's arbitration framework.

The 1988 Act was subjected to criticism for its lack of provisions regarding interim relief in support of arbitration. This often caused challenges for parties seeking injunctive relief before Nigerian courts, as illustrated in the case of NV Scheep v MV S Araz. The Nigerian Supreme Court's refusal to grant interim relief showcased the need for reform in this area.

One notable change introduced by the 2023 Act is the option of an Award Review Tribunal (ART). Parties can now include an ART option in their arbitration agreements, providing them with the opportunity to challenge an award before a second arbitral tribunal. While this may introduce additional complexity and delays, it can ultimately limit the scope of set aside decisions by Nigerian courts, potentially reducing costs for parties involved.

Prior to the new act, the issue of third party funding arrangements in Nigeria remained uncertain due to the risk of conflicting with the common law tort of maintenance and champerty. The 2023 Act has brought clarity to this matter by explicitly stating that these doctrines do not apply to third party funding arrangements for arbitration in Nigeria, making it the third jurisdiction, after Hong Kong and Singapore, to expressly recognize third party funding for arbitration through statute.

The 2023 Act also introduces provisions for consolidation of arbitral proceedings and the joinder of new additional parties, with the consent of all parties involved. This addresses the inefficiencies and duplication of proceedings that often arise when multiple and parallel actions are required.

The legislative changes in Nigeria's arbitration framework align with a wider trend of arbitration reform in Africa, with countries like Ethiopia, Tanzania, and Sierra Leone also making significant improvements in their arbitration regimes. These changes reflect a collective commitment to respecting the jurisdiction of arbitral tribunals, empowering them with the authority to grant interim measures, and minimizing the grounds for challenging jurisdiction and intervening in arbitral awards.

Overall, the introduction of the 2023 Arbitration and Mediation Act reinforces Nigeria's dedication to adopting international best practices and establishing itself as a leading arbitration jurisdiction in Africa. As these reforms take effect, Nigeria is poised to attract more arbitration cases and solidify its position as a major arbitration hub on the continent.

Source of content: OOO News 2023-09-13 News

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