How to Draft Enforceable Arbitration and Mediation Clauses in Nigeria, 2026 Update

Knowing how to draft an arbitration clause in Nigeria that will actually survive a court challenge has become more important, and more nuanced, since the Arbitration and Mediation Act 2023 overhauled the country’s dispute resolution framework. The Act introduced a statutory mediation regime, expressly recognised electronic arbitration agreements, and strengthened the obligation of courts to stay proceedings in favour of valid arbitration clauses. For in-house counsel, contracts teams and commercial lawyers updating dispute provisions ahead of new deals or refinancings, these changes demand a fresh look at every clause in the template library.

This guide provides the practical tools to get it right: annotated sample clauses, a seat-versus-governing-law decision framework, an enforcement playbook and a ten-point clause audit checklist, all calibrated to the 2026 regulatory landscape.

Quick Take, What This 2026 Update Means for Contract Drafters

The Arbitration and Mediation Act 2023 replaced the decades-old Arbitration and Conciliation Act (Cap A18 LFN 2004) and brought Nigerian arbitration law substantially closer to the UNCITRAL Model Law. For drafters, the practical headline is threefold: arbitration agreements can now be concluded electronically with full statutory backing, courts must stay litigation where a valid agreement exists, and mediated settlement agreements are now independently enforceable. These changes affect every commercial contract that touches Nigeria, from upstream oil-and-gas joint operating agreements to infrastructure EPC contracts and cross-border supply chains.

The three items that belong on every contract team’s action list right now:

• Audit existing arbitration clauses. Legacy “boilerplate” clauses drafted under the old Act may lack the specificity the 2023 regime rewards, particularly around seat, interim relief and multi-tier escalation.
• Consider adding a mediation tier. Part II of the Act gives mediated settlements enforcement teeth for the first time; a well-drafted multi-tier clause now has genuine commercial value.
• Update electronic contracting workflows. Section 3 of the Act means arbitration agreements exchanged by email, e-signature platforms or electronic data interchange are valid, but only if the clause language does not inadvertently require “wet ink” execution.

The Arbitration and Mediation Act 2023, Key Changes That Affect How You Draft an Arbitration Clause in Nigeria

The Arbitration and Mediation Act 2023 modernises Nigerian arbitration law by aligning it with international best practice, closing long-standing gaps that made arbitration clause drafting a higher-risk exercise than it needed to be. Understanding these changes is essential for anyone who needs to draft an arbitration clause for use in Nigeria or involving a Nigerian counterparty.

The Act clarifies the legal-seat concept, confirms that Nigerian courts must defer to valid arbitration agreements, and creates a standalone statutory framework for mediation, including enforceable mediated settlement agreements. It also expands the definition of an “arbitration agreement” to cover electronic communications, removing a source of uncertainty that had generated satellite litigation under the old regime. Industry observers expect these reforms to accelerate the adoption of arbitration across sectors that historically defaulted to litigation, particularly in real estate, energy and public-private partnerships.

Innovations Summary Table

Core Elements of an Enforceable Arbitration Clause in Nigeria

An enforceable arbitration clause under Nigerian law must, at minimum, contain a clear written agreement to submit disputes to arbitration, identify the scope of disputes covered, and designate a seat of arbitration. Beyond this statutory floor, arbitration clause drafting best practice under the 2023 Act demands attention to several additional elements that, if omitted, create enforcement risk or procedural ambiguity.

Mandatory and Strongly Recommended Elements

• Scope of disputes. Define precisely which disputes are covered, “all disputes arising out of or in connection with this Agreement” is the gold-standard formulation. Narrow carve-outs (e.g., for IP ownership or regulatory approvals) should be express.
• Seat of arbitration. The legal seat determines the procedural law of the arbitration and the courts with supervisory jurisdiction. Always state this expressly; do not conflate seat with venue (see below).
• Applicable arbitration rules. Specify the institutional rules (e.g., ICC, LCIA, Lagos Court of Arbitration) or confirm ad hoc arbitration under the Act. Ambiguity here is the single most common source of “pathological” clauses.
• Number and method of appointment of arbitrators. State whether the tribunal will comprise a sole arbitrator or a panel of three, and set out the appointment mechanism (including a fallback appointing authority).
• Language of arbitration. Essential in cross-border contracts. English is standard for Nigerian commercial arbitration but should be stated expressly.
• Governing law of the contract. This is distinct from the law of the seat. Specify the substantive law governing the contract itself to prevent disputes about applicable law consuming time and costs.
• Confidentiality. The Act does not impose a blanket duty of confidentiality. If the parties want confidential proceedings, the clause must say so.
• Interim relief. Expressly confirm that the tribunal may grant interim measures and, where desired, that parties may also apply to a competent court for interim or conservatory relief without waiving the arbitration agreement.
• Costs and fees allocation. Include a default position on cost allocation (e.g., “costs follow the event”) or delegate the decision to the tribunal.

Electronic Signatures and Multi-Tier Clauses

Section 3 of the Arbitration and Mediation Act 2023 removed any lingering doubt about the validity of electronic arbitration agreements. An arbitration agreement exchanged via email, concluded on an e-signature platform, or embedded in an electronically executed contract is now fully enforceable. Drafters should ensure their clause language does not inadvertently require physical signatures or “original” documents, as such wording could create an unnecessary evidentiary hurdle even though the Act would support enforcement.

Multi-tier clauses, requiring negotiation or mediation before arbitration, are increasingly common. Under the new statutory mediation framework, a well-drafted escalation mechanism carries real procedural weight. The key is to make each tier a genuine condition precedent with a defined time limit (e.g., “The parties shall attempt to resolve the dispute by mediation under Part II of the Act within 30 days of a written notice of dispute. If the dispute is not resolved within that period, either party may commence arbitration.”). Without a deadline, Nigerian courts may treat the mediation tier as aspirational rather than mandatory.

Common Drafting Mistakes

• Asymmetric or optional clauses. A clause giving only one party the right to elect arbitration may be challenged as lacking mutuality. Best practice: make the obligation to arbitrate bilateral and unconditional.
• Conflicting dispute resolution provisions. Including both a jurisdiction clause and an arbitration clause in the same contract creates a “pathological” conflict. Conduct a whole-contract audit to eliminate contradictions.
• Omitting a fallback appointing authority. If the parties cannot agree on an arbitrator, a clause that is silent on the appointing mechanism can stall proceedings entirely. Always name an appointing institution or default to the procedure prescribed by the Act.
• Vague scope language. Phrases like “major disputes” or “disputes of a technical nature” invite satellite litigation on whether a particular claim falls within the clause. Use the broadest defensible scope language.
• Ignoring the governing law of the arbitration agreement itself. In cross-border contracts, the law governing the arbitration agreement may differ from both the substantive governing law and the law of the seat. If this is relevant, state it expressly.

Seat vs. Venue vs. Governing Law, Making the Commercial Choice

Choosing the seat of arbitration in Nigeria, or outside Nigeria, is the single most consequential decision in arbitration clause drafting. The seat determines the supervisory court, the procedural law that fills gaps in the parties’ agreement, and (critically) the enforcement pathway for the resulting award.

Drafters must distinguish the seat (the legal jurisdiction of the arbitration), the venue (the physical location of hearings, which can differ from the seat), and the governing law of the contract (the substantive law applied to the merits). Conflating these three concepts is a frequent source of pathological clauses and post-award challenges.

When to Pick a Foreign Seat, Risk Checklist

Parties with a Nigerian counterparty sometimes prefer a foreign seat (London, Paris, Singapore) for perceived neutrality or familiarity with the supervisory courts. This is permissible, but it introduces trade-offs. A foreign-seated award must be enforced in Nigeria under the New York Convention regime and is subject to the grounds of refusal set out in the Act. If interim relief from Nigerian courts is needed mid-arbitration, the seat being outside Nigeria can complicate the application. For investor-state arbitration involving Nigeria, the seat choice interacts with bilateral investment treaty provisions and may be constrained by treaty terms.

Choice of Law Drafting Options

Best practice is to state three laws expressly: (1) the substantive governing law of the contract, (2) the law of the seat (which governs the arbitral procedure), and (3) where relevant, the law governing the arbitration agreement itself. In most domestic Nigerian transactions, all three will be Nigerian law, and a single statement suffices. In cross-border deals, separating them avoids enforcement disputes.

Mediation Clauses and Multi-Tier Dispute Resolution Under the New Act

Part II of the Arbitration and Mediation Act 2023 gives Nigerian mediation a statutory backbone for the first time, making it commercially viable to include a mediation clause in Nigeria as a binding step in the dispute resolution process. Mediated settlement agreements concluded under the Act are enforceable in the same manner as an arbitral award, which fundamentally changes the calculus for contract drafters considering multi-tier escalation mechanisms.

Model Mediation Clause

A standalone mediation clause for commercial contracts should include: (1) a clear trigger (written notice of dispute), (2) the mediation rules or procedure to be followed, (3) a time limit for completing mediation (typically 30–45 days), (4) the consequences of failure (escalation to arbitration or other agreed mechanism), and (5) provision for the enforceability of any settlement agreement under Part II of the Act. For contracts involving sovereign or quasi-sovereign parties, an adaptation referencing applicable treaty or statutory mediation mechanisms may be necessary.

How to Draft Enforceable Multi-Tier Escalations

The critical rule for multi-tier clauses under Nigerian law is precision. Each tier must have a defined deadline and a clear trigger for escalation to the next tier. A typical three-tier structure runs: (1) negotiation between senior representatives within 14 days of notice, (2) mediation under Part II of the Act within 30 days if negotiation fails, (3) arbitration if mediation fails or the mediation period expires. Nigerian courts are increasingly willing to treat properly drafted escalation steps as conditions precedent to arbitration. Without express deadlines, however, a court may find the pre-arbitration steps to be directory rather than mandatory, opening the door to a jurisdictional challenge.

Sample Arbitration and Mediation Clauses, Sector Templates

The following sample arbitration clause templates are designed for immediate use. Each includes numbered drafting notes referencing the provisions of the Arbitration and Mediation Act 2023 discussed above. Adapt the wording to your transaction; do not use any template without jurisdiction-specific legal review.

Template 1, General Commercial Arbitration (Domestic Seat)

“Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Arbitration and Mediation Act 2023. The seat of arbitration shall be Lagos, Nigeria. The tribunal shall consist of a sole arbitrator appointed by agreement of the parties, or in default of agreement within 14 days of notice of arbitration, by the President of the Chartered Institute of Arbitrators (Nigeria Branch). The language of the arbitration shall be English.”

• Note 1. Broad scope language (“arising out of or in connection with”) covers contractual and non-contractual claims.
• Note 2. Names a fallback appointing authority to prevent deadlock.
• Note 3. Sole arbitrator is cost-effective for lower-value disputes; switch to three for high-value or complex matters.

Template 2, Cross-Border (ICC Rules, Nigerian Party)

“All disputes arising out of or in connection with this Agreement shall be finally resolved by arbitration under the ICC Rules of Arbitration. The seat of arbitration shall be London, England. The number of arbitrators shall be three. The language of the arbitration shall be English. The substantive law governing this Agreement shall be the law of England and Wales.”

• Note 1. Foreign seat (London) ensures English Arbitration Act supervisory jurisdiction; award enforced in Nigeria under New York Convention.
• Note 2. Three arbitrators are standard for high-value ICC arbitrations.
• Note 3. Separates substantive governing law from law of the seat to avoid ambiguity.

Template 3, Oil and Gas Sector Clause

“Any dispute arising under or in connection with this Joint Operating Agreement shall be finally settled by arbitration in accordance with the Rules of the Lagos Court of Arbitration. The seat of arbitration shall be Lagos, Nigeria. The tribunal shall consist of three arbitrators, each of whom shall have not fewer than ten years’ experience in the oil and gas industry. The governing law of this Agreement shall be the laws of the Federal Republic of Nigeria. The proceedings and the award shall be confidential.”

• Note 1. Sector-specific arbitrator qualification prevents appointment of generalists unfamiliar with industry practice.
• Note 2. Confidentiality clause is necessary because the Act does not impose automatic confidentiality.
• Note 3. Lagos Court of Arbitration provides administered arbitration with local institutional support.

Template 4, Infrastructure / EPC Clause

“Disputes arising out of or relating to this EPC Contract shall first be referred to the parties’ senior representatives for negotiation within 14 days of written notice. Failing resolution, the dispute shall be submitted to mediation in accordance with Part II of the Arbitration and Mediation Act 2023 for a period not exceeding 30 days. If the dispute remains unresolved, it shall be finally determined by arbitration under the Act. The seat shall be Abuja, Nigeria. The tribunal shall comprise three arbitrators with experience in construction and infrastructure disputes.”

• Note 1. Multi-tier structure with defined deadlines at each stage.
• Note 2. Mediation under Part II makes the settlement agreement enforceable.
• Note 3. Abuja seat may be preferred for federal government or public-private partnership contracts.

Template 5, Investor-State Stub (Illustrative Only)

“In the event of a dispute between the Investor and the Host State arising under this Agreement, the Investor may, after exhausting any required consultations under the applicable bilateral investment treaty, submit the dispute to arbitration under the ICSID Convention or the UNCITRAL Arbitration Rules, as elected by the Investor.”

• Note 1. Investor-state arbitration in Nigeria is governed by treaty obligations; this clause is illustrative and must be tailored to the specific BIT or investment law in force.
• Note 2. The Arbitration and Mediation Act 2023 does not displace Nigeria’s obligations under ICSID or applicable BITs.

Template 6, Model Mediation + Multi-Tier Clause

“Any dispute shall first be submitted to mediation in accordance with Part II of the Arbitration and Mediation Act 2023 within 30 days of written notice. If mediation does not resolve the dispute within 30 days (or such longer period as the parties agree in writing), either party may refer the dispute to final and binding arbitration under the Act. The seat of arbitration shall be Lagos, Nigeria. The tribunal shall consist of a sole arbitrator.”

• Note 1. Mediation deadline triggers the right to commence arbitration, prevents indefinite stalling.
• Note 2. Settlement agreements reached in mediation are enforceable under Part II of the Act.
• Note 3. Combine with a confidentiality provision if commercial sensitivity requires it.

Enforcement and Resisting Enforcement, Step-by-Step Playbook to Enforce an Arbitration Award in Nigeria

The ability to enforce an arbitration award in Nigeria is the ultimate test of an arbitration clause’s value. The Arbitration and Mediation Act 2023 streamlined the enforcement regime for both domestic and foreign awards, but the process still requires careful procedural compliance. This section provides a step-by-step enforcement playbook for counsel.

Enforcing a Foreign Award, New York Convention Steps

Nigeria is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Under the Act, a party seeking to enforce a foreign arbitral award in Nigeria must apply to the High Court and supply: (1) the duly authenticated original award or a certified copy, (2) the original arbitration agreement or a certified copy, and (3) a certified translation if the award or agreement is not in English.

The court will recognise and enforce the award unless the respondent establishes one of the limited grounds for refusal, which mirror the New York Convention grounds (incapacity, invalid agreement, lack of due process, excess of jurisdiction, improper tribunal composition, award not yet binding or set aside, non-arbitrability, or public policy).

Early indications suggest that Nigerian courts are applying these grounds restrictively, consistent with the pro-enforcement policy embedded in the Act. The public policy ground, historically the most litigated, is being interpreted narrowly, limited to violations of Nigeria’s most fundamental legal principles rather than serving as a general merits review.

Setting Aside in Nigeria, Grounds and Timelines

An application to set aside a domestic award under the Act must be made within the time limit prescribed by the statute. The grounds for setting aside are modelled on Article 34 of the UNCITRAL Model Law: incapacity, invalid arbitration agreement, lack of proper notice, excess of jurisdiction, irregular tribunal composition or procedure, non-arbitrability, and conflict with Nigerian public policy. Critically, the Act does not permit a merits review, the court cannot re-examine the tribunal’s findings of fact or conclusions of law.

For counsel resisting enforcement, the practical playbook is to act immediately upon receipt of the award. The statutory timeline for filing a setting-aside application is strict, and failure to comply is fatal. Gather evidence of any procedural irregularity during the arbitration itself (e.g., lack of notice, failure to provide opportunity to present the case) and preserve the contemporaneous record.

Practical Timelines and Checklist for Counsel

• Immediately on receipt of award: Assess grounds for challenge or enforcement; preserve all procedural records.
• Within the statutory limitation period: File any setting-aside application; do not wait.
• Prepare enforcement application: Assemble authenticated award, arbitration agreement, and any required translations.
• File at the correct court: Federal High Court for federal-government-related disputes; State High Court otherwise, confirm jurisdiction before filing.
• Serve the respondent: Ensure proper service under applicable court rules.
• Oppose any stay application: If the award debtor seeks a stay of enforcement pending a setting-aside challenge, prepare submissions on the narrow grounds for stay.
• Monitor parallel proceedings: If the award is being challenged at the seat, keep the Nigerian enforcement court informed and argue that the challenge does not automatically suspend enforcement.

Practical Drafting Checklist and Negotiation Playbook, Contract Clause Audit

Use this ten-point checklist when auditing or negotiating arbitration and mediation clauses in any Nigerian commercial contract. Each point maps to the enforceability requirements discussed in this guide.

1. Scope: Does the clause cover “all disputes arising out of or in connection with” the agreement? If not, widen it.
2. Seat: Is the legal seat expressly stated and distinguished from any physical venue?
3. Rules: Are the applicable arbitration rules identified (institutional or ad hoc under the Act)?
4. Arbitrator appointment: Is there a clear mechanism, including a fallback appointing authority?
5. Number of arbitrators: Is it stated (sole or three)? Does the choice match the value and complexity of the deal?
6. Governing law: Are the substantive law, the law of the seat, and (if relevant) the law of the arbitration agreement each stated?
7. Multi-tier steps: If mediation or negotiation is required, are there defined deadlines and clear escalation triggers?
8. Interim relief: Does the clause preserve both tribunal-ordered and court-ordered interim measures?
9. Confidentiality: If required, is it expressly stated? (The Act does not impose automatic confidentiality.)
10. No conflicting clause: Have you audited the entire contract (including schedules and side letters) for contradictory jurisdiction or litigation clauses?

Negotiation fallback language: Where a counterparty resists arbitration, an acceptable compromise is a multi-tier clause with mediation as the first tier and arbitration as the final tier. This preserves access to a binding resolution mechanism while accommodating parties who prefer to attempt negotiated settlement first. Never agree to clauses that make arbitration merely “optional” or subject to one party’s election, such clauses risk being held unenforceable for lack of mutuality.

Conclusion

The Arbitration and Mediation Act 2023 has fundamentally improved the toolkit available to parties who draft arbitration clauses for Nigerian transactions. Electronic agreements, mandatory court stays, enforceable mediation settlements and clearer setting-aside grounds all reward well-drafted clauses and punish sloppy boilerplate. Every contract team working on a Nigerian deal in 2026 should treat clause drafting as a strategic exercise, not a cut-and-paste afterthought. Use the templates, checklists and enforcement playbook in this guide as a starting point, and seek jurisdiction-specific legal review from a qualified dispute resolution practitioner before finalising any clause. For assistance locating experienced counsel, consult the Nigeria dispute resolution lawyer directory.

Last reviewed: 15 May 2026

Sources

1. Arbitration & Mediation Act, 2023, Aceris Law copy (PDF)
2. IBA, “The Nigerian Arbitration and Mediation Act 2023”
3. Nigerian Judicial Institute (NJI), AMA 2023 guidance materials (PDF)
4. Mondaq, “Making Arbitration Clauses Work” (5 January 2026)
5. Yusufali, “An X‑Ray of Nigeria Arbitration and Mediation Act 2023: A Practitioners’ Guide” (PDF)
6. ALP NG & Co., Model Arbitration Clause resource
7. CIArb, Model contract clauses (PDF)
8. Broderick Bozimo & Co., Arbitration and Mediation Act 2023 (PDF)