How to Commence a Commercial Arbitration Claim in Nigeria Under the Arbitration and Mediation Act, 2023

If you are preparing to commence a commercial arbitration claim in Nigeria under the Arbitration and Mediation Act, 2023 (AMA 2023), the practical question is straightforward: do you have a valid arbitration agreement, and have you satisfied any pre-conditions to arbitration in that agreement? The AMA, which received presidential assent on 26 May 2023, replaced the former Arbitration and Conciliation Act, 1988 (Cap A18, Laws of the Federation of Nigeria 2004) and introduced significant procedural innovations, emergency arbitration, the Award Review Tribunal, and expanded interim-measures powers, that reshape how parties initiate and conduct arbitral proceedings.

At Vantage Attorneys LP, we regularly advise commercial parties navigating these new procedures, and in this guide I set out the exact step-by-step process from the first review of your arbitration clause through to filing your Statement of Claim and beyond.

Legal Basis, the AMA 2023 in Brief and What Changed

The Arbitration and Mediation Act, 2023 is the most significant reform of Nigerian arbitration law in over three decades. Enacted by the National Assembly and signed into law on 26 May 2023, the AMA repealed the Arbitration and Conciliation Act of 1988 and brought Nigerian arbitration practice into closer alignment with the UNCITRAL Model Law on International Commercial Arbitration (2006 revision).

For practitioners and commercial parties, the AMA introduced several innovations that directly affect how you commence and manage an arbitration claim in Nigeria:

• Emergency arbitration. Parties can now apply for urgent interim relief before the full tribunal is constituted, a tool that did not exist under the old regime.
• Award Review Tribunal (ART). An optional appellate-review mechanism for arbitral awards seated in Nigeria, providing an alternative to court-based challenges.
• Expanded interim measures. The AMA codifies broad powers for tribunals to grant preliminary orders and interim measures, including asset preservation and anti-dissipation relief.
• Joinder and consolidation. The Act now expressly permits joinder of additional parties and consolidation of related arbitrations, subject to party agreement.
• Third-party funding. The AMA recognises and regulates third-party funding of arbitration, removing prior legal uncertainty.
• Arbitrator and institutional immunity. Statutory protection for arbitrators and arbitral institutions acting in good faith.

Key AMA Definitions to Know Before You Begin

Before you commence proceedings, ensure your team is working with the correct statutory definitions. Under the AMA 2023:

• Arbitration agreement means an agreement by parties to submit to arbitration all or certain disputes that have arisen or may arise between them in respect of a defined legal relationship, whether contractual or not.
• Seat of arbitration refers to the juridical seat, the legal jurisdiction governing the procedural law of the arbitration, which is distinct from the physical venue of hearings.
• Award includes interim, partial, additional and final awards made by the tribunal.

Step 1, Check the Arbitration Agreement and Pre-Conditions Under AMA 2023

The single most important step before you commence a commercial arbitration claim in Nigeria is to scrutinise the arbitration agreement itself. An arbitration that proceeds on a defective or non-existent clause is vulnerable to jurisdictional challenge, wasting time and costs from the outset.

Run through this checklist before you take any further action:

• Is there a valid arbitration clause or submission agreement? Under the AMA, an arbitration agreement must be in writing (which includes electronic records and exchanges). Confirm the clause covers the dispute in question, many clauses are narrowly drafted to cover only “disputes arising out of” the contract, which may exclude tortious or statutory claims.
• Seat and governing law. Identify the seat of arbitration. If the clause specifies a Nigerian seat, the AMA governs the procedural framework. If the seat is abroad, the AMA may still apply to enforcement in Nigeria but the procedural law will be that of the seat.
• Pre-conditions and escalation clauses. Many commercial contracts include a dispute-resolution ladder requiring negotiation, mediation or conciliation before arbitration can be commenced. Failure to comply with a mandatory pre-condition can result in the tribunal declining jurisdiction or staying proceedings.
• Notice periods. Check whether the contract prescribes a notice period or a limitation period for commencing arbitration. Missing a contractual deadline can extinguish the right to arbitrate.
• Institutional rules or ad hoc. Determine whether the clause refers disputes to a specific arbitral institution, such as the Lagos Court of Arbitration, the International Chamber of Commerce, or the London Court of International Arbitration, or whether the arbitration is ad hoc.

Validity Red Flags

In my experience, the most common issues that derail commencement are:

• Pathological clauses, clauses that name a non-existent institution, contradict themselves, or fail to specify a mechanism for appointing arbitrators.
• Lack of corporate authority, confirming that the signatory to the arbitration agreement had the corporate power to bind the party.
• Scope ambiguity, disputes that arguably fall outside the clause (e.g., claims in tort, unjust enrichment, or fraud).

Practical tip: If there is any doubt about the validity or scope of the arbitration clause, seek specialist advice before issuing a Notice of Arbitration. A defective commencement invites a jurisdictional challenge that can delay proceedings by months.

Step 2, Drafting and Serving the Notice of Arbitration in Nigeria

Once you have confirmed that a valid arbitration agreement exists and all pre-conditions have been met, the next step is to prepare and serve a Notice of Arbitration. The Notice is the formal document that commences the arbitral process. Under the AMA 2023, an arbitration is deemed to have commenced on the date the respondent receives the Notice of Arbitration, unless the parties have agreed otherwise.

Your Notice of Arbitration should contain, at a minimum, the following elements:

• Full identification of the parties. Names, registered addresses, and contact details of the claimant and respondent.
• Reference to the arbitration agreement. Identify the underlying contract, the specific arbitration clause, and the date of the agreement.
• Brief statement of facts. A concise summary of the dispute, what happened, when, and the contractual provisions that have been breached.
• Relief sought. Specify the remedies you are claiming: monetary damages (with a preliminary quantification if possible), declaratory relief, specific performance, or other remedies.
• Seat and applicable rules. State the proposed or agreed seat of arbitration and the applicable arbitration rules (institutional or ad hoc under the AMA).
• Number and method of appointment of arbitrators. Propose the number of arbitrators (one or three, as the clause requires) and the appointment mechanism.
• Claimant’s arbitrator nomination. If the agreement calls for three arbitrators, include the claimant’s nomination of its party-appointed arbitrator, together with a curriculum vitae and a statement confirming the nominee’s availability and independence.
• Language of arbitration. State the proposed language of the proceedings if the clause does not already specify.
• Address for service. The claimant’s address for receiving communications, including email addresses for electronic service.
• Signature and date. The Notice should be signed by an authorised representative or counsel and clearly dated.

Practical Tips on Service and Proof of Delivery

Effective service of the Notice of Arbitration is critical. Under the AMA, notices and communications are deemed received on the day they are delivered to the addressee personally, at the addressee’s place of business, habitual residence, or mailing address, or, if none of these can be found after a reasonable inquiry, at the addressee’s last known address by registered letter or any other means that provides a record of the attempt at delivery.

• Use tracked delivery. Send the Notice by courier with signed proof of delivery, and simultaneously by email with a read-receipt request. Retain all tracking records.
• Serve at the contractual address. The address stated in the underlying contract for notices is usually the safest starting point, unless you have evidence that the respondent has relocated.
• Record the date. The date of receipt determines when the arbitration commenced and triggers any applicable limitation or response deadlines.
• Duplicate copies. If the arbitration is institutional, serve the Notice on the institution simultaneously with service on the respondent, in accordance with the institution’s rules.

Practical tip: If the respondent refuses to accept or acknowledge delivery, the arbitration is not invalidated. The AMA provides that service is effective once delivered to the last known address. If service remains obstructed, a party may apply to the court for assistance.

Step 3, Appointing Arbitrator(s) and Handling Conflicts

Appointing the right arbitrator is one of the most consequential decisions in any arbitration. The AMA 2023 provides a default framework for appointment that applies unless the parties have agreed to a different mechanism, including submission to the rules of an arbitral institution.

The key appointment scenarios are:

• Sole arbitrator. If the parties have agreed to a sole arbitrator but cannot agree on a candidate, either party may request the court to make the appointment.
• Three arbitrators. Each party appoints one arbitrator. The two party-appointed arbitrators then select a presiding arbitrator. If a party fails to appoint within the agreed or prescribed period, or the two arbitrators fail to agree on a presiding arbitrator, the court may intervene to make the appointment.
• Institutional rules. If the arbitration is administered by an institution, for example, the Lagos Court of Arbitration or the Regional Centre for International Commercial Arbitration, the institution’s own appointment rules will apply, including its procedures for selecting arbitrators from its panel.

Arbitrator Independence and the Grounds for Challenge

The AMA requires every arbitrator, upon appointment, to disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. This obligation is ongoing throughout the proceedings.

An arbitrator may be challenged on the following grounds under the AMA:

• Circumstances that give rise to justifiable doubts as to the arbitrator’s impartiality or independence.
• The arbitrator does not possess qualifications agreed upon by the parties.

Challenges must be made promptly, typically within the time limit specified by the applicable rules or within a reasonable time after the challenging party becomes aware of the relevant circumstances. A late challenge may be waived.

Practical tip: Before nominating an arbitrator, carry out a thorough conflicts check, review the candidate’s prior appointments, published writings, and any disclosed connections to the opposing party. This diligence is essential to avoid a derailing challenge later in the proceedings. For a deeper discussion on the role of arbitration in resolving disputes in Nigeria, including how tribunal composition affects outcomes, see our related analysis.

Step 4, Filing the Statement of Claim, Response and Evidence

Once the tribunal is constituted, the claimant must file a Statement of Claim within the period agreed by the parties or fixed by the tribunal. The Statement of Claim is the substantive foundation of your case, and its quality directly affects every stage that follows, from document production to the hearing and, ultimately, the award.

A well-structured statement of claim in a commercial arbitration in Nigeria should contain the following sections:

• Parties. Full details of claimant(s) and respondent(s), including legal status and representative capacity.
• Jurisdiction and procedural history. Reference the arbitration agreement, the Notice of Arbitration, the constitution of the tribunal, and the seat and applicable rules.
• Statement of facts. A chronological, precise narration of the material facts giving rise to the dispute. Reference specific contractual clauses, correspondence, and dates.
• Contractual and legal basis. Identify the specific contract terms that have been breached, the applicable law, and the legal principles supporting the claim.
• Cause of action. Articulate each distinct cause of action clearly, breach of contract, negligence, unjust enrichment, or otherwise.
• Quantum and damages. Set out the basis for calculating damages, including a breakdown of heads of loss and supporting calculations.
• Relief sought. A precise prayer for relief, monetary amounts, interest, costs, declaratory relief, or specific performance.
• List of supporting documents. An index of all exhibits, annexures, and documentary evidence appended to or referenced in the claim.

Evidence Bundles, Witness Statements and Expert Reports

The tribunal will typically issue procedural directions setting out a timetable for the exchange of evidence. In my practice, I advise clients to begin preparing evidence bundles as early as possible, ideally during the drafting of the Notice of Arbitration. Key considerations include:

• Witness statements. Prepare written witness statements from individuals with direct knowledge of the facts. Under the AMA, the tribunal may direct that witness evidence be given in writing, orally, or both.
• Expert reports. If quantum, technical issues, or industry practice are in dispute, consider engaging an expert early. Expert reports should comply with any directions issued by the tribunal regarding format, disclosure, and independence.
• Electronic exhibits. The AMA recognises electronic records. Ensure digital documents are properly authenticated, paginated, and presented in a format accessible to the tribunal.
• Document preservation. Issue litigation-hold notices within your organisation as soon as a dispute is contemplated. Failure to preserve relevant documents can result in adverse inferences.

A typical procedural timetable from commencement to first hearing might look like this:

These timelines are indicative and will vary depending on the complexity of the dispute, the number of parties, and whether the arbitration is institutional or ad hoc. For practical guidance on hearing preparation, see our detailed overview on preparation for and conduct of arbitration hearings.

Step 5, Emergency Arbitration and Interim Relief in Nigeria

One of the most important innovations in the AMA 2023 is the introduction of emergency arbitration in Nigeria. Before the AMA, parties seeking urgent interim relief before the tribunal was constituted had no choice but to apply to the courts, a process that could be slow and, in cross-border disputes, unpredictable.

Under the AMA, a party may apply for the appointment of an emergency arbitrator to grant urgent interim measures where the matter cannot wait for the constitution of the full tribunal. The emergency arbitrator has the power to order:

• Preservation of assets. Freezing orders or injunctions to prevent dissipation of assets pending the outcome of the arbitration.
• Preservation of evidence. Orders to prevent destruction or concealment of relevant documents.
• Injunctive relief. Orders maintaining the status quo or preventing a party from taking action that would render the arbitration futile.

Emergency arbitration applications must demonstrate genuine urgency and a real risk of irreparable harm if relief is not granted immediately. In my experience, the threshold is high, the applicant must show that waiting for the full tribunal would cause harm that cannot be adequately compensated by damages.

It is important to note that a party’s right to seek interim measures from a court is not extinguished by the existence of an emergency arbitration mechanism. The AMA expressly provides that court-ordered interim measures and arbitrator-ordered interim measures are not incompatible. This gives claimants a tactical choice: apply to the emergency arbitrator for speed and confidentiality, or apply to the court for an order that may take more time to come but carries immediate coercive enforcement power.

Award Review Tribunal and Court Interaction, Tactical Implications for Commencing Proceedings

The Award Review Tribunal (ART) is perhaps the most debated innovation of the AMA 2023, and it has significant tactical implications for any party preparing to commence a commercial arbitration claim in Nigeria. Understanding the ART at the outset, before you issue the Notice of Arbitration, is essential to making informed strategic decisions about the structure of the proceedings.

The ART is an optional mechanism. Where the parties have agreed, either in their arbitration agreement or by separate agreement after a dispute arises, an arbitral award may be reviewed by a fresh panel of arbitrators (the ART) rather than being immediately subject to court challenge. The ART can affirm, vary, or set aside the original award. Critically, the grounds for ART review are broader than the narrow grounds on which a court may set aside an award under the AMA.

This creates a strategic calculation at the commencement stage:

• Opt-in to ART. If your client values finality within the arbitral process and wants to minimise the risk of protracted court challenges, including an ART clause in the arbitration agreement (or agreeing to ART post-dispute) can provide a structured appellate route. Once the ART affirms an award, the scope for successful court challenge is narrower.
• Opt-out of ART. If speed and enforceability are paramount, particularly in international arbitrations where you intend to enforce the award outside Nigeria under the New York Convention, the ART adds an additional layer and potential delay. Some counterparties may use an ART election as a tactical tool to prolong finality.

Court Remedies Versus the ART Process

Where no ART has been agreed, the losing party’s recourse is to apply to the court to set aside the award on the limited grounds specified in the AMA, which broadly mirror the UNCITRAL Model Law grounds (incapacity, invalidity of the arbitration agreement, inability to present one’s case, the award dealing with matters beyond the scope of the submission, improper tribunal composition, or public-policy grounds).

Where the parties have opted into the ART, the ART hears the review first. The interaction between the ART and the courts is an area that will be clarified by judicial practice over time. In my view, the better reading of the AMA is that once an ART has rendered its decision, the scope for further court intervention is limited to the narrow grounds applicable to any arbitral award, meaning the ART decision itself becomes, in effect, the final award subject only to those grounds.

For parties involved in international commercial disputes, this interplay is particularly significant. An award that has been affirmed by an ART seated in Nigeria should, in principle, be enforceable under the New York Convention in the same way as any final award, but this has not yet been extensively tested in foreign courts. Parties should factor this enforcement risk into their commencement strategy.

Practical tip: Address the ART question before you issue the Notice of Arbitration. If the arbitration agreement is silent on ART, consider whether to propose an ART clause in the Terms of Reference or by separate agreement. The decision should be informed by the likely quantum of the dispute, the counterparty’s likely enforcement strategy, and the desired speed of resolution. For more on challenges to arbitral awards and enforcement, see our dedicated guide.

Practical Timelines, Costs and Common Procedural Traps

Even with a clear legal framework, arbitrations can be derailed by procedural errors at the commencement stage. Below are the most common traps I see in practice, and practical guidance on costs and timelines.

Common procedural traps, what to avoid:

• Defective Notice of Arbitration. Omitting required elements (e.g., failing to nominate an arbitrator or to specify the seat) can delay proceedings and invite jurisdictional challenges.
• Ignoring pre-conditions. Failing to comply with a contractual mediation or negotiation step before commencing arbitration may result in the tribunal staying or dismissing the claim.
• Late arbitrator challenges. Not raising conflict-of-interest objections promptly can result in waiver, leaving you with a tribunal you do not trust.
• Inadequate evidence preservation. Failing to issue internal document-hold notices before commencement can result in the loss of key evidence.
• Wrong seat election. Choosing a seat without considering the supervisory court’s track record on arbitration-friendly jurisprudence, enforcement treaties, and procedural law can create problems at the award-enforcement stage.

Cost drivers to budget for:

• Institutional administration fees (if applicable), these are typically calculated as a percentage of the amount in dispute.
• Arbitrator fees, sole arbitrators are less expensive than three-member tribunals, but a three-member panel may be required for complex or high-value disputes.
• Legal representation costs, counsel fees for drafting pleadings, preparing evidence, attending hearings, and managing post-award enforcement.
• Expert and witness costs, fees for expert reports, travel, and witness preparation.
• Venue and hearing-room hire, relevant for in-person hearings.

Dos and Don’ts checklist:

• Do engage experienced arbitration counsel before serving the Notice.
• Do conduct a conflicts check on proposed arbitrators immediately.
• Do preserve all documents and electronic records from the date the dispute arises.
• Don’t assume a court litigation strategy will transfer directly to arbitration, the procedures, evidence rules, and tactical dynamics are different.
• Don’t overlook the ART election, address it at the commencement stage, not after an adverse award.
• Don’t serve the Notice at an incorrect address if the respondent’s current address is reasonably ascertainable.

Conclusion, Next Steps for Commencing Your Arbitration Claim

The Arbitration and Mediation Act, 2023 has given Nigeria a modern, internationally aligned arbitration framework. For any business or legal team looking to commence a commercial arbitration claim in Nigeria under this Act, the process can be distilled into a clear sequence: verify the arbitration agreement, draft and serve a compliant Notice of Arbitration, appoint the right arbitrator(s), prepare a thorough Statement of Claim, and make informed tactical decisions about emergency relief and the Award Review Tribunal from the outset.

In my experience, the parties that achieve the best outcomes in Nigerian arbitration are those that invest in rigorous preparation at the commencement stage, getting the Notice right, choosing the right seat and institution, and building the evidence foundation before the first procedural conference. Cutting corners at this stage invariably generates cost and delay later. For a broader perspective on how arbitration fits within the Nigerian commercial dispute landscape, I recommend reviewing our overview of the role of arbitration in resolving disputes in Nigeria and our practical guide to preparation for and conduct of arbitration hearings.

Sources

1. National Assembly of the Federal Republic of Nigeria, Arbitration and Mediation Act
2. UNCITRAL Model Law on International Commercial Arbitration (2006)
3. United Nations Commission on International Trade Law, Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention)
4. International Bar Association, The Nigerian Arbitration and Mediation Act 2023
5. Kluwer Arbitration Blog, Harnessing the Potential of Award Review Tribunals in Nigeria
6. Nigerian Journals Online, Academic Analysis of AMA 2023 Provisions