Nigeria is set to have a new arbitration regime. The Arbitration and Mediation Bill 2022 was passed by the Senate of the Federal Republic of Nigeria, on 10th May 20222, after a 16-year struggle to have a reformed arbitration legislation tailored to meet the need of users, especially the corporates.

Among innovative provision in the Bill is the codification of an Arbitral Tribunal’s power to award costs incurred in the arbitration, including cost of obtaining third-party funding, in favour of the prevailing party in any arbitration, and the express abolition of the torts of champerty and maintenance.

The use of third-party funding in international arbitration has become a huge mechanism that promotes access to justice for corporates all over the world. This is because even though arbitration is the preferred dispute resolution mechanism for commercial disputes, the funds to institute and defend arbitration claims has always been a major challenge for many corporates, as the rising costs of instituting and defending claims places a strain on their balance sheets.

This article highlights the benefits, as we as the safeguards for the use of third-party funding for corporates under the new arbitration regime Nigeria.

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