Uzoma Azikiwe and Olukayode Dada of Udo Udoma & Belo-Osagie assess the mechanisms being put in place to deal with lengthy litigation procedures

The people of Nigeria have, in the Constitution of the Federal Republic of Nigeria, 1999 (1999 Constitution), vested the legislative, executive and judicial powers of the state in the national and state assemblies, the President and governors, and the courts respectively. No result of any dispute resolution mechanism can be lawfully enforced in Nigeria without recourse to a court of law. By the judicial powers vested in the judiciary, Nigerian courts have the final authority, inter alia, to: construe commercial agreements; review the exercise by regulators of their powers; delineate by interpretation, the extent of the powers of regulators under the enabling statutes; and to generally protect investment and rights. The relevance of the court system to business relationships and investors cannot therefore, be over-emphasised. For Nigeria to achieve its economic objectives and the 'fundamental objectives' as set out in chapter 2 of the 1999 Constitution, stakeholders have agreed that it is necessary that the system of dispute resolution by the Nigerian courts should be efficient and cases promptly determined. An efficient court system that resolves cases speedily is capable of positively impacting levels of investment and economic activity. Foreign investors and indeed Nigerian businesses, can benefit from mechanisms for speedy and efficient resolution of their commercial disputes. An improved system of dispute resolution prevents much-needed capital for driving continuous growth from being unduly tied down by protracted litigation.

As litigation becomes protracted, the Nigerian judiciary continues to devise mechanisms for the speedy resolution of commercial disputes. Such mechanisms include the court-connected multi-door courthouse ADR (alternative dispute resolution) system and the fast-track procedure, two of the most significant mechanisms that the judiciary has put in place to foster speedy and efficient resolution of (particularly commercial) disputes.

Multi-door courthouse ADR system

ADR is a generic term that describes the various methods of resolving disputes other than by the customary adversarial litigation mechanism. Major ADR methods include mediation, conciliation and arbitration. Although arbitration as an ADR method is popular in Nigeria, its effectiveness has been hampered by parties who have recourse to the courts to challenge arbitral awards and thereby protract a dispute resolution mechanism that would otherwise have been a speedy process. Besides, to enforce an arbitral award, the successful party must, as a matter of law, have recourse to the courts, which process is usually exploited by an aggrieved party to prolong the final resolution of the dispute and payment of the award. Arbitration in Nigeria may therefore be described as 'little more than an expensive foreplay to litigation' (William W Park).

Nigerian courts have, in response to expressed concerns over the delay in resolution of disputes, put in place rules for speedier resolution of any appropriate claim filed in court by ADR. Such rules seek to curtail the delay in the process of enforcement of an arbitral award or an ADR settlement, and to prevent resolution of a dispute from being bogged down by protracted litigation at least in the court of first instance. See, for example, in Order 3 rule 11 of the High court of Lagos State (Civil Procedure Rules) 2012 (Lagos High Court Rules) and Order 17 rule 1 of the High Court of the Federal Capital Territory (Civil Procedure) Rules 2004 (FCT High Court Rules). The rules of civil procedure of the high courts enjoin parties to a suit to have recourse to ADR or the multi-door courthouse as an alternative for resolution of their disputes and then give the resultant terms of settlement a stamp of judicial authority.

The Multi-Door Courthouse (MDC) is a centre for ADR that is independently run and managed by ADR professionals, but is attached or connected to a high court. There are three MDCs in Nigeria, namely the Lagos Multi-Door Courthouse (LMDC), the Abuja Multi-Door Courthouse (AMDC) and the Kano Multi-Door Courthouse (KMDC) for Lagos State, the Federal Capital Territory, Abuja and Kano State respectively. The MDC offers different mechanisms, or doors, for resolving disputes in respect of cases that may or may not already be within the court system.

The services rendered by the MDC are mediation, arbitration and early-neutral evaluation. The LMDC handles cases bordering on several subjects including: banking; general commercial transactions; construction; maritime; telecommunication; energy; employment; personal injury; probate; product liability; professional malpractice or negligence; real property; securities; and shipping and transportation. The main focus of the LMDC is commercial ADR and development of sector-specific dispute resolution mechanisms for commerce and industry

A matter comes before the MDC in three ways, namely:

Court-referred cases: a judge or magistrate may refer to an MDC an existing case that he deems suitable for resolution by ADR. If the case is resolved, parties execute an agreement containing terms of settlement and the case file is sent back to the referring court so that the terms of settlement may be entered as consent judgment by the referring judge. For instance, Order 25 rule 2(j) of the Lagos High Court Rules provides for reference of a litigated matter to the LMDC.
Walk-in cases: parties to a dispute may, also, apply directly to an MDC for resolution of their dispute, with or without having first commenced an action in court. Parties may specify in their commercial agreements that any disputes will be resolved by mediation or arbitration conducted by the MDC.
Direct intervention: the MDC can, also, assist parties in the resolution of their disputes by extending an invitation to the disputing parties.
For a walk-in case, the applicant files a request form and statement of issues and serves the same on the respondent. Within seven days of filing a request form or receipt of a referral from the court, a notice of referral is sent to the other party, along with a submission form and a copy of the applicant's statement of issues. The respondent has seven days to submit the submission form to the MDC along with four copies of a brief statement in response. Once the statement of issues and statement in response have been filed, the registrar within the MDC assigns the matter to the dispute resolution officer (DRO), who conducts a preliminary screening of the matter to determine such matters as the nature of the claim, reliefs sought and the most appropriate method of ADR for handling the matter. A pre-session meeting is held once the appropriate door has been determined, where the DRO explains the ADR process and procedure to the parties. A list of neutrals is also given to the parties at this stage, and it is their choice as to whom they decide to appoint as a mediator from the list. They may be guided by the DRO if necessary. Parties then sign a confirmation of attendance form and a confidentiality agreement. An ADR session is scheduled and convened as soon as a mediator or arbitrator has signified consent.

If the ADR session is successful, the DRO will write out the terms of the confidential agreement and it will be passed to an ADR judge for endorsement as consent judgment (or to the referring judge if it was a court referred matter). (See the Practice Direction on Mediation Procedure issued in 2008 by the Chief of Lagos State under section 30 of the Lagos Multi-Door Courthouse Law, 2007)

If the ADR session is unsuccessful, the matter is either sent back to the court (if it was court-referred) or, if it was a walk-in matter, parties can then decide whether or not to commence a legal action.

For recalcitrant parties, it is important to mention that a striking characteristic of the court-connected MDC is the power given to an ADR judge to give appropriate directives to recalcitrant parties, including the power to order the claimant and defendant to file a statement of case and response within 14 days, respectively, and to dismiss the claim or enter judgment against the defendant as the case may be.

Once a court-referred case is resolved before an MDC, the parties execute an agreement containing their terms of settlement and the case file is sent back to the referring court in order that the terms of settlement may be entered as the consent judgment of the court.

When a walk-in case is resolved by an MDC, parties also enter a terms of settlement which is referred to a judge known as the ADR Judge, who will enter the terms of settlement as a consent judgment of the court.

Advantages of the MDC system?

ADR provides a speedy resolution of disputes and flexibility. The MDC process offers an added advantage by enabling the involvement and oversight of the judiciary. The terms of settlement reached through an MDC dispute resolution process entered as a judgment of court brings finality to the result of the dispute resolution mechanism and, being a consent judgment, parties are precluded from re-litigating their dispute. When the court enters the terms of settlement as its consent judgment in a matter, it becomes binding and enforceable by the parties as any other judgment of court.

There is a limited right of appeal from a consent judgment, rendering it more likely that parties will comply with it rather than elongate the dispute resolution process by filing an appeal to the Court of Appeal. By virtue of section 241(2)(c) of the 1999 Constitution of the Federal Republic of Nigeria, 1999 (as amended), a party may only appeal from a consent judgment with the leave of court. This provision has been applied by Nigerian courts in many cases. In the case of SPM v Adetunji 2009 13 NWLR (part 119) 647, the Supreme Court stated:

It must be pointed out that it is one of the cardinal principles of our judicial system to allow parties to amicably resolve the disputes between them. By doing so, the otherwise hostile relationship between the parties would be amicably resolved and cemented. It is this amicable resolution of disputes by the parties that is called settlement. When the terms of such settlements are reduced into writing, it is now called 'terms of settlement'. When the terms of settlement are filed in court and made judgment of the court, it is then crystalised into 'consent judgment'. When consent judgment is given, none of the parties has the right of appeal, except with the leave of court.

The Fast Track Procedure

The Fast Track Procedure (FTP) under the High Court of Lagos State (Civil Procedure) Rules, 2012 (CP Rules) offers investors and entrepreneurs another opportunity for a speedy resolution of commercial disputes.

As provided in Order 56 of the Lagos High Court Rules on the FTP, its main objective is to reduce time spent on litigation to a period not exceeding nine months from the commencement of the action until final judgment.

For a claim or suit to qualify for the FTP, the following conditions must be met: (i) the suit must be commenced by a writ of summons; (ii) an application requesting that the suit be placed on FTP must be made to the registrar of court; and (iii) the claim is for liquidated monetary claims or counterclaim in a sum not less than N100 million ($503,000) or the claim involves a mortgage transaction, charge or other securities regardless of the value of the transaction, or the claimant is suing for a liquidated monetary claim and is not a Nigerian national or resident in Nigeria and such facts are disclosed in the pleadings.

A liquidated monetary claim is a claim for a specific sum of money, which is not required to be fixed by the court upon a further investigation. In the case of Maja v Samourig2002 FWLR (part 98) 818, the Supreme Court of Nigeria defined it as an 'ascertained or specific amount' meaning 'that there is nothing more that needs further to be done to determine the quantum or extent of the defendant's liability'.

Distinctive features of the FTP

There are certain FTP features which differentiate it from an ordinary procedure for determining a suit. For example, the writ of summons used to commence a suit for FTP must be served within 14 days of filing, unlike under an ordinary procedure where there is no time limited for service of the originating processes.

Under the FTP, the time provided for the claimant to file its reply to the statement of defence is within seven days, but in an ordinary procedure, a claimant has 14 days to do so. An FTP claimant has seven days within which to apply for the issuance of the case management conference (CMC) notice after the close of pleadings, as opposed to 14 days in the ordinary procedure.

The FTP rules prescribe that CMC be concluded within a period of 30 days, but may be allowed for a further period of 14 days by the CMC judge. The time prescribed for completion of CMC under an ordinary procedure is three months, which may be further extended by the judge.

Where parties are unable to reach an amicable settlement during the CMC in a suit under the FTP, upon conclusion of the CMC, the case is immediately forwarded to the chief judge for assignment to a trial judge. At the first appearance of parties before the court, the trial judge will issue directions for trial. Where any direction for trial is varied as a result of default by any of the parties, the judge may impose costs or default fees on the defaulting party and failure to comply with any directions will not lead to adjournment of the trial unless the circumstances of the failure are exceptional.

The rules require parties to make any application which is not included in the trial timetable in a timely manner, to minimise the need to change the timetable.

The trial of an FTP suit is required to be conducted from day to day unless the court otherwise directs. The court is mandated to regard the adjournment of trial as an order of last resort and where the court has no option but to adjourn the trial, it would do so for the shortest possible time.

The mandate of the rules is that the entire trial period including the final addresses of counsel, should not be later than 90 days from the date the trial directions were made. To ensure compliance with the 90-day rule, the periods within which parties may file and serve their final written addresses have been accordingly abridged to 14 days for each of the parties and seven days to file and serve a reply on points of law, if necessary.

The judge is mandated to deliver judgment within 60 days of the completion of trial.

Advantages of the FTP

The speed of resolution of commercial disputes is a major advantage of the FTP. In view of the clear timelines set by the rules, FTP suits are designed to be heard expeditiously and are accorded priority by the court. Although the filing fees for an FTP suit are higher than the fees for filing a suit under the ordinary procedure, the fact that FTP suits are heard expeditiously (unlike an ordinary suit, which typically lasts longer) could potentially drive down the fees, and costs of litigation.

The earlier resolution of FTP suits also offers the potential of efficiency resulting from conscious efforts to streamline the process to focus only on the critical aspects of the dispute. This minimises unproductive efforts, such as excessive and unfocused discovery and frivolous applications.

The chief judge designates a number of judges to hear and determine FTP suits. Consequently, litigants are likely to benefit from the expertise and experience the judges have acquired over time in dealing with FTP suits.

Creating an investor destination

The introduction of the MDC system as a court-connected ADR is a laudable improvement in the management of litigation and dispute resolution in Lagos and Kano States, and the Federal Capital Territory. Not only has it assisted in managing the congested dockets of the high courts in the two densely populated commercial cities of Lagos and Kano, but disputes have also been resolved with less animosity between disputants. The MDC and FTP provide unique opportunities for speedy and efficient resolution of commercial disputes.

However, these dispute resolution mechanisms are of limited availability in Nigeria. The MDC system is only available in two states (Lagos and Kano States) and the FCT, Abuja. The FTP procedure is only available in Lagos State.

Under Nigerian law, for a court to be competent to adjudicate on a contractual dispute: (i) the contract must have been entered into within its territorial jurisdiction; (ii) the contract was performed or to be performed within its territorial jurisdiction; or (iii) the intended defendant resides or carries on business within its territorial jurisdiction. Although parties may, by their arbitration agreement, contract to refer their disputes to any of the MDCs whether or not the conditions for the exercise of jurisdiction are present, regarding the FTP, only matters in respect of which the High Court of Lagos State is competent to adjudicate on may be taken in Lagos State.

The other states of Nigeria should follow the example of Lagos State in reforming the litigation procedures to make the respective states and, therefore, the entire country, an investor destination.


  First published by our sister publication IFLR magazine. Take your free trial today.


Uzoma Azikiwe
Udo Udoma & Belo-Osagie

About the author

Uzoma Azikiwe is a partner and the head of the firm's litigation, arbitration and alternative dispute resolution team. He represents clients and provides advice across the firm's areas of specialisation including corporate, maritime, aviation, employment and energy and natural resources disputes and matters. He trained as an international commercial arbitrator with several organisations including the ICC Institute of World Business Law, the Chartered Institute of Arbitrators in the UK, Chartered Institute of

Arbitration (Nigeria) and Chartered Institute of Mediation and Conciliation. He obtained a diploma in international commercial arbitration at St. Anne's College, Oxford, UK and has benefitted from

PIDA training in International Commercial Contracts and training by the Chartered Institute of Taxation of Nigeria.

He has published various articles on different issues and aspects of commercial law and presents papers at and conducts seminars for various major service companies in the oil industry in Nigeria on employment and labour matters. He is recognised by Who's Who Legal.

Olukayode Dada
Udo Udoma & Belo-Osagie

About the author

Olukayode Dada is a senior associate and a member of the firm's litigation and dispute resolutions practice. He is also a member of the firm's business ethics and investigations practice. His core specialisations are civil and commercial litigation and alternative dispute resolution, and his general corporate practice experience has included providing advisory and transactional support services to clients in relation to large and complex commercial transactions, international business, debt recovery, legislative drafting, and advising on maritime, intellectual property, regulatory compliance and corporate governance matters. He is a member of the Chartered Insurers' Institute of Nigeria (CIIN).

Dada has authored several articles on topical aspects of law, including: On Service Marks and the Ministerial Fiat; Bringing an end to Litigation: The Doctrine of Estoppel by Record under Nigerian Law; Enforcement of Judgment against the Nigerian Government by way of Garnishee Proceedings: The Attorney-General's Hurdle; and Standing to Sue in International Commercial Transactions.