Tiwalade Aderoju
Olympus Solicitors and Advocates, Lagos
tiwaade@ymail.com

Introduction

The relationship between arbitration and the courts is frequently described as a partnership: one often characterised by cooperation as well as tension.^[1] On one hand, arbitration offers parties a private, flexible and neutral forum for resolving disputes. On the other, national courts continue to play a role in ensuring that arbitration agreements are upheld, arbitral tribunals have the support they need to operate effectively, and that awards are enforced. It has been found that arbitration practice thrives when this balance is well maintained. Where it falters, confidence in the arbitral process is also shaken.

In recent years, Nigeria has become one of the most closely watched jurisdictions for arbitration-related litigation.^[2] The country is uniquely positioned as Africa’s largest economy and a hub for international investment; it is therefore becoming a frequent seat and site of arbitration-related litigation, especially for transactions involving Nigerian counterparties.^[3] The oil and gas sector, large-scale infrastructure projects and financial services all depend on robust dispute resolution mechanisms. With this in mind, it is clear that the choices made by Nigerian courts in arbitration-related disputes do not only affect domestic commerce: they also have an effect across borders, as they impact how foreign investors, counterparties and arbitral institutions perceive the jurisdiction.

The passage of the Arbitration and Mediation Act 2023 (AMA 2023) has added new urgency and relevance to this conversation. The legislation introduced several reforms to align Nigeria with global best practices, including express recognition of emergency arbitrators, third-party funding provisions and clearer enforcement procedures for arbitral awards. However, as always – and particularly in Nigeria – the true measure of reform is not in what is written in legislation but in how it is interpreted and applied by the courts. Recent judicial decisions have already tested the reach and resilience of these provisions, providing practical insights into how Nigerian arbitration practice is evolving in real time.

This article examines the recent developments in arbitration-related litigation in Nigeria. In doing so, it aims to foster international dialogue while equipping businesses, counsel and investors with practical insights into navigating arbitration in an interconnected world.

Recent judicial developments in arbitration-related litigation

Arbitration in practice hinges on party autonomy and judicial support. Since the enactment of the AMA 2023, Nigerian courts have continued to test that relationship, sometimes reinforcing arbitration’s finality and enforceability, and at other times exposing fault lines that counsel and investors are to consider. Several themes dominate the recent litigation, including:

• the enforcement of foreign awards;
• threshold for misconduct;
• the use (and misuse) of injunctions to derail arbitration; and
• the emerging practice around interim relief, notably emergency arbitrators under the AMA 2023.

Each area reveals both progress and practical friction.

Enforcement of foreign arbitral awards

As generally accepted, enforcement is the acid test for any arbitration regime.^[4] The AMA 2023 sought to sharpen Nigeria’s enforcement architecture and align it with the New York Convention and the UNCITRAL Model Law. In practice, recent court decisions show that Nigerian judges are increasingly conscious of reputational risk and the need to honour international enforcement norms, although they are not yet uniformly predictable.

The most high-profile example affecting perceptions of Nigeria’s arbitration posture was the litigation surrounding P&ID. In litigation in the English courts, the large awards against Nigeria were successfully challenged on grounds of fraud and public policy-related misconduct which was a decision that significantly impacted the arbitration community. The P&ID saga highlighted the fact that a successful award can still be overturned where convincing evidence of fraud is shown: it encouraged Nigerian courts to take a careful, fact-sensitive approach when asked to refuse enforcement.

Nigerian courts are also under pressure to resist expansive appeals to ‘public policy’ when resisting enforcement, foreign courts are also innovating remedies such as anti-enforcement injunctions to prevent their own judgments from being used as instruments of fraud. This development underscores a broader trend: enforcement is being reframed as a matter of protecting judicial integrity and preventing abusive litigation tactics, rather than merely a technical inquiry into arbitral procedure.

Threshold for misconduct

The integrity of arbitration depends on the finality of awards and the reluctance of courts to entertain merit-based challenges under the guise of procedural complaints. The AMA 2023 preserves well-established grounds for setting aside awards, including misconduct by the tribunal. This term, though inherited from earlier statutes, has often been contested in Nigerian courts. The key issue is whether ‘misconduct’ should be read broadly, covering any perceived unfairness or error, or narrowly, restricted to conduct that fundamentally undermines the arbitral process.

The Court of Appeal’s decision in NICON Insurance Ltd v Brighthouse Estate Ltd^[5] provides a valuable lens through which this tension can be examined. In that case, Brighthouse had obtained an arbitral award against NICON arising from a property development dispute. Dissatisfied, NICON sought to set aside the award, arguing that the arbitrator had exceeded his jurisdiction and committed misconduct. Among other things, NICON contended that the arbitrator had improperly evaluated evidence and failed to give sufficient weight to its arguments.

The High Court rejected these claims, and the Court of Appeal upheld the ruling. In a decisive statement, the appellate court stressed that ‘misconduct’ cannot be equated with mere errors of judgement, unfavourable findings or dissatisfaction with the reasoning of the arbitrator. Instead, the concept must be confined to instances such as corruption, evident bias or breaches of natural justice that strike at the root of the proceedings. The court further held that, since NICON had actively participated in the arbitration without raising timely objections, it was estopped from challenging jurisdiction after the fact.

This decision is significant for several reasons. First, it reaffirms Nigeria’s alignment with global pro-enforcement standards, echoing the principle under the New York Convention that enforcement is the rule and refusal the exception. Second, it places a heavy burden on parties alleging misconduct, requiring them to produce compelling evidence of irregularity rather than speculative complaints. Finally, it cautions litigants against using post-award challenges as a backdoor appeal, thereby safeguarding arbitration’s finality.

There are still challenges. For one, the precise contours of ‘misconduct’ in Nigerian law are not fully settled, particularly as the AMA 2023 retains the language without detailed statutory definition. While NICON v Brighthouse curbs frivolous challenges, it leaves open questions about borderline scenarios including, for example, whether persistent refusal to admit key evidence amounts to misconduct even where there is no bad faith? How should Nigerian courts handle cases where fairness concerns are raised but evidence of bias is indirect? These ambiguities mean that, in practice, outcomes may depend on judicial discretion and expertise, raising the spectre of inconsistency.

The broader policy issue is a familiar one in that efficiency and finality must be balanced against fairness and legitimacy. A too-rigid enforcement culture risks alienating parties who feel procedural justice has been sacrificed, while a too-permissive approach invites abuse and delay. In NICON v Brighthouse, the Court of Appeal appears to have struck the right chord by insisting on strict proof of misconduct while preserving room for intervention in egregious cases. The decision therefore serves as a milestone in Nigeria’s arbitration jurisprudence, underscoring that misconduct is not a catch-all refuge for losing parties but a high threshold safeguard against genuine injustice.

Judicial intervention and anti-arbitration/anti-suit injunctions

Interlocutory litigation designed to derail or delay arbitration has been a notable tactic in recent years. In relation to this, Nigerian courts have struggled between protecting parties’ constitutional rights of access to court and the need to respect contractual arbitration agreements.^[6]

The High Court of Lagos’ decision in PE Bitumen Resources v Cocean Nigeria Integrated Ltd^[7] is instructive in this regard. In this case, the Court granted an anti-suit injunction to PEBR, restraining Cocean from pursuing court actions that breached an existing arbitration agreement. The court found Cocean’s actions to be an abuse of the court process and a violation of the International Chamber of Commerce (ICC) arbitration agreement. The ruling affirmed the principle of party autonomy in arbitration by forcing Cocean to adhere to the agreed-upon dispute resolution method.

That willingness has not been absolute across all trial courts. Appellate decisions, however, have been corrective and, on balance, arbitration friendly. In particular, the Court of Appeal and higher tribunals have reiterated the competence-competence principle and cautioned against premature court intervention except in cases of patent fraud, illegality or where arbitration agreements are void. The net effect of this is a tiered reality where parties may still face disruptive injunction applications at interlocutory stages, but expect appellate review that protect arbitration autonomy. Practitioners should therefore budget both for tactical litigation and for the likely corrective effect of the appeal process.

Public policy and arbitrability

Public policy and arbitrability are live and sometimes unpredictable battlegrounds. Nigerian jurisprudence is gradually moving away from an expansive economic interest framing towards a standard that reflects international practice (ie, only the most fundamental notions of justice and morality should impact enforcement). This alignment was evident where courts rejected attempts to refuse enforcement on the basis of regulatory non-compliance alone.

Regardless, certain subject matters – notably disputes implicating natural resources, sovereign prerogatives or public contracts – still invite close judicial scrutiny. Cases involving state entities or petroleum sector interests are likely to be treated with greater caution. As such, parties should remain alert to the possibility that arbitrability objections will be pursued more vigorously in these contexts. Until higher courts establish a consistent standard across sectors, risk allocation in contracts with Nigerian counterparties must explicitly address arbitrability and enforcement contingencies.

Procedural orders, interim awards and judicial oversight

A defining feature of arbitration is the tribunal’s procedural autonomy. Parties entrust arbitrators with wide discretion to manage proceedings efficiently and fairly, free from excessive court interference. This autonomy is reflected in the AMA 2023, which vests tribunals with powers to determine admissibility of evidence, allocate procedural timelines, and regulate document production (sections 30–33). Traditionally, courts are expected to respect these discretionary powers, intervening only when there is clear evidence of breach of natural justice.

The decision in Bayshore Technologies Ltd v Green Fuels Ltd^[8] has, however, complicated this understanding. The dispute arose in relation to a technology supply contract. During the arbitration, Bayshore requested extensive document disclosure which the tribunal refused, issuing Procedural Order No 8 to that effect. Bayshore approached the Federal High Court, arguing that the refusal violated its right to fair hearing under section 36 of the Constitution and the equal treatment principle enshrined in section 30 of the AMA.

In a striking move, the Court classified the procedural order as an ‘interim award’ and intervened, directing Green Fuels to produce the requested documents. This reasoning effectively collapsed the long-standing distinction between non-reviewable procedural directions and substantive awards subject to judicial oversight. The Court justified its stance on the ground that fairness and equality of arms are constitutional imperatives that must guide arbitral practice in Nigeria.

The implications of this ruling are profound. On the one hand, the decision demonstrates the judiciary’s readiness to safeguard constitutional guarantees within arbitral proceedings. It sends a strong message to tribunals that discretion is not unfettered and must always be exercised with due regard to fairness and balance between parties. This could enhance confidence in arbitration for parties who may otherwise distrust private dispute resolution mechanisms.

On the other hand, the judgment risks undermining arbitral efficiency. By opening the door for procedural rulings to be recharacterised as ‘interim awards’, the decision potentially invites a flood of opportunistic court challenges during arbitration, disrupting timelines and inflating costs. If every procedural decision, from document production to scheduling orders, is susceptible to judicial review, arbitration could lose its distinct advantage over litigation in terms of flexibility and speed.

Comparatively, most leading arbitral jurisdictions adopt a far more deferential posture. English courts, for example, have consistently held that procedural orders are within the tribunal’s exclusive competence and not subject to judicial interference.^[9] Singaporean courts similarly limit intervention to situations of manifest unfairness or breach of natural justice. Nigeria’s willingness to treat a procedural order as an interim award therefore sets it apart, and unless carefully circumscribed, could create uncertainty for international parties considering Nigeria as a seat of arbitration.

The broader policy concern is whether Nigerian courts are recalibrating the balance between arbitral autonomy and judicial oversight too far in favour of constitutional guarantees. While the protection of fair hearing is unquestionably central, there is a risk that arbitration may become judicialised, with courts micromanaging procedure under the banner of fairness. In a commercial context where predictability and efficiency are prized, this could diminish Nigeria’s competitiveness as an arbitral hub.

Conclusion

Recent cases before the Nigerian courts reveal a judiciary that is gradually embracing its supportive role in favour of arbitration, while still grappling with challenges of overreach, procedural uncertainty and inconsistent interpretation of statutory provisions. The struggle between judicial deference and intervention has created both opportunities for reform and risks of undermining investor confidence in the arbitral process.

In a globalised commercial environment, where parties seek predictability and neutrality, the Nigerian experience provides a cautionary but instructive example of how litigation trends can either strengthen or weaken the attractiveness of arbitration as a dispute resolution tool.