ADR / Arbitration Clause (Nigeria)
ADR / ARBITRATION CLAUSE
Arbitration and Mediation Act 2023 (AMA 2023) | New York Convention 1958 | Singapore Convention on Mediation
This ADR / Arbitration Clause ("Clause") is entered into on [Effective Date] between [Party 1 Name] of [Party 1 Address] ("Party 1") and [Party 2 Name] of [Party 2 Address] ("Party 2") in relation to the [Main Contract Name] ("the Contract").
1. SCOPE
1.1 Any dispute, controversy, or claim arising out of or in connection with the Contract — including any question regarding its existence, validity, interpretation, performance, breach, or termination — shall be resolved in accordance with the tiered dispute resolution procedure set out in this Clause.
2. TIER 1 — SENIOR MANAGEMENT NEGOTIATION
2.1 A party wishing to invoke this Clause shall serve a written Notice of Dispute on the other party.
2.2 Within 5 business days of receipt of the Notice, senior management representatives of each party shall meet (in person, by video conference, or by telephone) and attempt in good faith to resolve the dispute within [Negotiation Period] business days of the Notice (the "Negotiation Period").
2.3 If the dispute is not resolved within the Negotiation Period, either party may proceed to Tier 2 (if applicable) or directly to arbitration under Clause 4.
3. TIER 2 — MEDIATION (where applicable: [Include Mediation])
3.1 If the dispute is not resolved under Tier 1, either party may refer the dispute to mediation by serving a written notice on the other party.
3.2 The mediation shall be conducted under the mediation rules of the [Arbitration Institution], or such other mediator as the parties may agree, within [Mediation Period] days of the mediation notice.
3.3 Any mediation settlement agreement is binding and enforceable under the Arbitration and Mediation Act 2023 and the Singapore Convention on Mediation.
3.4 If the dispute is not resolved within the mediation period, either party may proceed to arbitration under Clause 4.
4. ARBITRATION
4.1 Any dispute not resolved under Tier 1 or Tier 2 shall be finally settled by binding arbitration administered by [Arbitration Institution] in accordance with its rules as in force at the date of the dispute.
4.2 Seat of arbitration: [Seat of Arbitration].
4.3 Number of arbitrators: [Number of Arbitrators].
4.4 Language of arbitration: [Arbitration Language].
4.5 The arbitral award shall be final and binding on the parties and may be enforced as a judgment of the Federal High Court of Nigeria under Section 57 of the Arbitration and Mediation Act 2023, and in any other jurisdiction under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.
5. GOVERNING LAW
5.1 The Contract is governed by [Governing Law]. The procedural law of the arbitration is the law of the seat of arbitration.
6. INTERIM RELIEF (where applicable: [Include Interim Relief Carve-out])
6.1 Nothing in this Clause prevents either party from applying to a court of competent jurisdiction for urgent interim injunctive, asset-preservation, or other interim relief pending the constitution of the arbitral tribunal. Such application does not waive the right to arbitrate.
7. CONFIDENTIALITY (where applicable: [Include Confidentiality])
7.1 The arbitration proceedings, all pleadings, evidence, and the arbitral award are confidential and shall not be disclosed to any third party without the written consent of both parties, except as required by law or to enforce the award.
Dated: [Effective Date]
Signed for and on behalf of [Party 1 Name]:
Signature: ___________________________ Name: ___________________________ Date: ___________
Signed for and on behalf of [Party 2 Name]:
Signature: ___________________________ Name: ___________________________ Date: ___________
Party 1
________________
Signature
Party 2
________________
Signature
What Is a ADR / Arbitration Clause (Nigeria)?
An ADR / Arbitration Clause in Nigeria documents the adr arbitration clause in a form the parties and authorities can rely on.
The primary legislation governing arbitration in Nigeria is the Arbitration and Mediation Act 2023 (AMA 2023), which received Presidential assent on 26 May 2023 and repealed the Arbitration and Conciliation Act Cap A18 LFN 2004. The AMA 2023 is based on the 2006 UNCITRAL Model Law on International Commercial Arbitration and adopts international standard practices, significantly modernising Nigeria's arbitration framework and enhancing Nigeria's attractiveness as a seat for international commercial arbitration in West Africa.
The AMA 2023 makes mediation a fully fledged, separately recognised ADR mechanism alongside arbitration. Nigeria signed the United Nations Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention) in 2019, and the AMA 2023 provides the domestic framework for enforcing international mediation settlement agreements — a significant development that makes mediated settlements in Nigerian commercial disputes enforceable across Singapore Convention signatory states.
A valid arbitration agreement under the AMA 2023 requires that the agreement be in writing, which includes agreements concluded by electronic means such as email, electronic contracts, or data messages. The agreement must be clearly worded to refer disputes to arbitration and must cover an existing or future legal relationship. Pathological arbitration clauses — clauses that are unclear, contradictory, or specify a non-existent institution — have been struck down or construed narrowly by Nigerian courts, including the Federal High Court of Nigeria and the Court of Appeal.
The Lagos Court of Arbitration (LCA) and the Lagos Regional Centre for International Commercial Arbitration (LRCICA) are the leading institutional arbitration providers in Nigeria. The Lagos State Multi-Door Courthouse (LMDC) provides court-connected ADR services. The Federal Ministry of Justice's Arbitration Policy of Nigeria supports the development of Nigeria as a regional arbitration hub.
The legal framework governing the ADR / Arbitration Clause (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a ADR / Arbitration Clause (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Arbitration and Conciliation Act (Cap. A18, LFN 2004) sets the foundational requirements.
When Do You Need a ADR / Arbitration Clause (Nigeria)?
Every Nigerian commercial contract of significant value or complexity should include an ADR/Arbitration clause to provide a clear, efficient, and enforceable dispute resolution mechanism if the commercial relationship breaks down.
When a Lagos-based technology company enters a software development agreement with a client, the parties should include an arbitration clause specifying the Lagos Court of Arbitration (LCA) as the administering institution, Lagos as the seat, and the AMA 2023 as the governing arbitration statute. Without such a clause, a dispute would be litigated before the Lagos State High Court or Federal High Court, with proceedings that can take years to reach a final judgment.
When a multinational corporation contracts with a Nigerian supplier for goods or services worth more than NGN 50,000,000, the parties should include a tiered ADR clause requiring senior management negotiation, then ICC or LCIA mediation, then international arbitration — with a choice between Lagos and an internationally neutral seat such as London or Singapore.
When an oil and gas company operating under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) or its successors under the Petroleum Industry Act 2021 needs to resolve technical and commercial disputes that arise from complex long-term arrangements, an arbitration clause with a specialist institution (such as the LCA or ICC) and a mechanism for appointing arbitrators with petroleum industry expertise is essential.
When a construction company enters a large infrastructure contract with a Nigerian state government or federal agency, an arbitration clause compliant with the AMA 2023 provides both parties with a neutral, expert forum for resolving technical, delay, and payment disputes without disrupting the project through litigation.
When two parties wish to add a dispute resolution mechanism to an existing contract that lacks one, a standalone ADR/Arbitration Addendum can be executed as a supplementary agreement to the existing contract, specifying that it governs all existing and future disputes arising from the principal agreement.
Parties in Nigeria should prepare a ADR / Arbitration Clause (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your ADR / Arbitration Clause (Nigeria)
A Nigeria ADR/Arbitration Clause should contain the following essential components to be valid and effective under the Arbitration and Mediation Act 2023.
Scope of disputes: A clear statement that all disputes, controversies, or claims arising out of or in connection with the contract — including disputes about its existence, validity, interpretation, performance, breach, or termination — are subject to the clause. The broad drafting ("arising out of or in connection with") is preferred under the AMA 2023 to minimise arguments that a particular dispute falls outside the clause.
Tiered escalation: Step 1 (negotiation): an obligation for the parties to attempt good-faith negotiation through senior management representatives within a specified period (typically 20 business days of written notice). Step 2 (mediation): if negotiation fails, referral to mediation before a named institution or mediator within a further specified period. Under the AMA 2023, mediation settlement agreements are enforceable. Step 3 (arbitration): if mediation fails or is not completed within the specified period, referral to binding arbitration.
Arbitral institution and rules: Specify the administering institution (e.g., Lagos Court of Arbitration (LCA), LRCICA, ICC, or LCIA) and the version of institutional rules to apply. If ad hoc arbitration is preferred, specify UNCITRAL Arbitration Rules.
Seat of arbitration: The city and country designated as the legal seat, which determines the procedural law (Lagos, Nigeria invokes the AMA 2023; London invokes the Arbitration Act 1996 (UK); Singapore invokes the International Arbitration Act (Singapore)).
Number of arbitrators: One arbitrator for disputes below a specified threshold (e.g., NGN 100,000,000); three arbitrators for disputes above that threshold. Specify the appointment mechanism for each scenario.
Language: English is standard for Nigerian commercial arbitration.
Governing law of the contract: The clause should confirm that the substantive agreement is governed by Nigerian law (or the specified governing law), separately from the procedural law of the arbitration.
Interim measures: A carve-out confirming that either party may apply to a Nigerian court or foreign court for urgent interim injunctive relief without waiving the right to arbitrate — important for asset-freezing and injunction applications.
Confidentiality: A statement that the arbitration proceedings and all materials and awards are confidential, consistent with the AMA 2023's confidentiality provisions.
Award finality: A statement that the arbitral award is final and binding on the parties, and may be enforced before the Federal High Court of Nigeria as a court judgment under Section 57 of the AMA 2023.
Additional compliance elements for a ADR / Arbitration Clause (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). ADR / Arbitration Clause (Nigeria) (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/business/contracts/adr-arbitration-clause-nigeria
"ADR / Arbitration Clause (Nigeria) (Nigeria)." Forms Legal, 2026, https://forms-legal.com/nigeria/business/contracts/adr-arbitration-clause-nigeria.
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author = {{Forms Legal}},
title = {ADR / Arbitration Clause (Nigeria) (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/business/contracts/adr-arbitration-clause-nigeria}},
note = {Free legal document template. Based on Arbitration and Conciliation Act (Cap. A18, LFN 2004)}
}Frequently Asked Questions
Yes, arbitration is legally binding and widely enforced in Nigeria. The Arbitration and Mediation Act 2023 (AMA 2023), which repealed and replaced the Arbitration and Conciliation Act Cap A18 LFN 2004, is Nigeria's primary arbitration statute. The AMA 2023 is based on the 2006 UNCITRAL Model Law on International Commercial Arbitration and brings Nigerian arbitration law into alignment with modern international standards. Under the AMA 2023, a valid arbitration agreement in writing (including agreements concluded by electronic means) binds the parties to refer disputes to arbitration rather than court litigation. The Federal High Court of Nigeria and the relevant State High Courts have jurisdiction to support arbitration proceedings — including the appointment of arbitrators where parties fail to agree, granting interim measures, and enforcing arbitral awards — but cannot hear the substantive merits of a dispute covered by a valid arbitration clause. An arbitral award made under the AMA 2023 is enforceable as a judgment of the Federal High Court under Section 57 of the Act. Nigeria is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, enabling Nigerian arbitral awards to be enforced in over 170 countries. A Nigerian court will enforce a foreign arbitral award from a New York Convention country subject to the limited grounds for refusal set out in Section 59 of the AMA 2023, which mirror the Convention's Article V grounds.
The Arbitration and Mediation Act 2023 (AMA 2023) is the most significant reform of Nigerian arbitration and ADR law in decades. Key changes include: (1) Adoption of the 2006 UNCITRAL Model Law as the basis for the AMA 2023, replacing the 1985 Model Law framework of the previous legislation — this aligns Nigeria with leading arbitration jurisdictions including Singapore, the UK, and Hong Kong; (2) Recognition and enforceability of mediation settlement agreements under the Singapore Convention on Mediation (the UN Convention on International Settlement Agreements Resulting from Mediation), which Nigeria signed — this is a major development for mediation practice in Nigeria; (3) Statutory recognition of emergency arbitrator provisions, allowing parties to obtain urgent interim relief from an emergency arbitrator before the full tribunal is constituted; (4) A revised framework for court intervention in arbitration, reducing the circumstances in which Nigerian courts can intervene and strengthening the principle of kompetenz-kompetenz (the tribunal's power to rule on its own jurisdiction); (5) Clarification of the enforceability of arbitration agreements in multi-party and multi-contract scenarios; (6) Updated rules for arbitral tribunal-ordered interim measures; and (7) Formal recognition of the Lagos Court of Arbitration (LCA), the Lagos Regional Centre for International Commercial Arbitration (LRCICA), and the Abuja Regional Centre for International Commercial Arbitration as designated Nigerian arbitration institutions.
A well-drafted Nigerian arbitration clause under the Arbitration and Mediation Act 2023 (AMA 2023) should specify the following essential elements. First, the scope of disputes covered — the clause should state whether it covers all disputes arising from or in connection with the contract, or only specific categories of disputes. A broadly drafted clause (covering all disputes) is generally recommended to avoid jurisdictional arguments. Second, the seat of arbitration — the seat determines the procedural law governing the arbitration and the supervisory court. Specifying Lagos or Abuja as the seat invokes the AMA 2023 as the procedural law. Parties may also choose an international seat (London, Paris, Singapore) if both parties are internationally oriented. Third, the arbitral institution and rules — specifying an institution (such as the Lagos Court of Arbitration (LCA), the Lagos Regional Centre for International Commercial Arbitration (LRCICA), the Arbitration and Conciliation Centre of the Nigerian Bar Association, the ICC, or LCIA) and its rules provides a ready-made framework for administering the arbitration. Ad hoc arbitration under UNCITRAL Rules is also valid. Fourth, the number of arbitrators — one arbitrator for smaller disputes, three for larger commercial matters. Fifth, the language of arbitration — English is standard in Nigerian commercial contracts. Sixth, the governing law of the contract — the law governing the substantive agreement (usually Nigerian law) should be stated separately from the procedural law of the arbitration.
A tiered ADR clause (also called a multi-step or escalation clause) is a dispute resolution clause that requires the parties to attempt earlier, less formal dispute resolution steps before proceeding to arbitration or court. A typical tiered clause for Nigerian commercial contracts might require the parties to: first, attempt to resolve the dispute through senior management negotiation within 20 business days of a written notice of dispute; second, if negotiation fails, refer the dispute to mediation before a mediator appointed by the Lagos Court of Arbitration or another institution within 30 days; and third, if mediation fails, refer the dispute to binding arbitration under the Arbitration and Mediation Act 2023. Tiered ADR clauses are particularly recommended in Nigeria for several reasons. They preserve business relationships and reduce costs: the vast majority of commercial disputes are resolved at the negotiation or mediation stage, avoiding the cost and delay of arbitration entirely. The Arbitration and Mediation Act 2023 explicitly recognises mediation as a distinct and enforceable dispute resolution mechanism, including the enforceability of mediation settlement agreements under the Singapore Convention on Mediation framework. Nigerian courts — including the Lagos State Multi-Door Courthouse (LMDC) — have actively promoted tiered ADR approaches.
Nigeria has several reputable arbitration institutions capable of administering domestic and international commercial disputes. The Lagos Court of Arbitration (LCA) is Nigeria's leading commercial arbitration institution, based in Lagos, with its own institutional arbitration rules (LCA Rules). The LCA administers both domestic and international commercial arbitrations and has an established panel of arbitrators with expertise across Nigerian commercial law, oil and gas, construction, and finance. The Lagos Regional Centre for International Commercial Arbitration (LRCICA) is a UNCITRAL-designated regional arbitration centre for West Africa that administers international commercial arbitrations under the UNCITRAL Arbitration Rules and its own rules. The Arbitration and Conciliation Centre of the Nigerian Bar Association (NBA-ACE) is another Nigerian institution with rules based on the AMA 2023 framework. The Abuja Regional Centre for International Commercial Arbitration (ARCICA) serves the FCT and northern Nigeria. For disputes with an international dimension, parties may specify the International Chamber of Commerce (ICC) Court of Arbitration, the London Court of International Arbitration (LCIA), or the Singapore International Arbitration Centre (SIAC) as administering institutions, with the seat of arbitration in those cities or in Nigeria. The Chartered Institute of Arbitrators (CIArb) Nigeria Branch provides a pool of qualified arbitrators for ad hoc proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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