I have spent over a decade in active litigation, and I remain a firm believer in the courtroom as an indispensable forum for justice. But I have also watched too many commercially sound relationships get needlessly destroyed by disputes that never should have reached a courtroom in the first place. This is where Alternative Dispute Resolution (ADR) earns its keep.
Why ADR, and Why Now
Nigerian courts remain, in many respects, under-resourced relative to caseload. Commercial disputes that could be resolved in months routinely take years. For a business, that delay is not a neutral cost — it is capital tied up, relationships strained, and management attention diverted from actually running the enterprise.
ADR mechanisms — arbitration, mediation, conciliation, and structured negotiation — exist precisely to address this. They are not a lesser form of justice. They are, in many commercial contexts, the more appropriate one.
The Main Mechanisms
Arbitration
Arbitration remains the most commonly used ADR mechanism in commercial contracts, particularly cross-border ones. Nigeria's Arbitration and Mediation Act, 2023 modernized the framework considerably, aligning it more closely with international best practice (including provisions influenced by the UNCITRAL Model Law) and introducing emergency arbitrator provisions for urgent interim relief.
When it works best: High-value commercial disputes where confidentiality matters, where the parties want a decision-maker with specific technical or industry expertise, and where enforceability across borders (via the New York Convention) is important.
Mediation
Mediation is non-binding until the parties reach and sign a settlement agreement, and it preserves relationships in a way litigation and even arbitration often cannot. It is particularly well suited to disputes between parties who need to continue working together — joint venture partners, family businesses, landlord-tenant relationships.
When it works best: Where an ongoing relationship has value, where the dispute is more about miscommunication or changed circumstances than a fundamental breach, and where speed matters more than a binding precedent-setting outcome.
Negotiation
Often overlooked as "not really ADR," structured negotiation — especially when conducted with proper legal guidance from the outset — resolves the majority of disputes before they ever need a third-party neutral. The discipline of documenting positions, interests, and fallback options early tends to produce faster, cheaper resolutions.
Drafting for ADR Before the Dispute Arises
The best time to think about dispute resolution is when there is no dispute — at the contract drafting stage. A well-drafted dispute resolution clause should specify:
- The mechanism — arbitration, mediation, or a tiered approach (negotiate, then mediate, then arbitrate).
- The seat and governing law — particularly important for cross-border contracts.
- The institution or rules, if arbitration (e.g., the Lagos Court of Arbitration, ICC, or ad hoc under the Arbitration and Mediation Act).
- Timelines, to prevent a dispute resolution clause from becoming its own source of delay.
Vague or boilerplate dispute resolution clauses are, in my experience, one of the most common — and most costly — drafting oversights in commercial contracts.
A Balanced View
None of this is to say litigation should be abandoned. Some disputes — those involving fraud, third-party rights, or where a binding public precedent is actually desirable — are better suited to the courts. The point is that ADR should be a default consideration, not an afterthought reached for only once litigation has already stalled.
If you are negotiating a commercial agreement or already navigating a dispute and want to explore whether ADR is the right path, reach out for a confidential consultation.