EVALUATING THE IMPACT OF THIRD-PARTY FUNDING ON EXPANDING ACCESS TO ARBITRATION IN NIGERIA: OPPORTUNITIES, CHALLENGES, AND STRATEGIC RECOMMENDATIONS.

Abstract

The cost of arbitration proceedings could be challenging for certain parties and is capable of discouraging them from filing their matters for arbitration. Section 62 of the Arbitration and Mediation Act 2023 (AMA) introduced the practice of third-party funding (TPF) as a modern means of managing the cost, thereby increasing the access to arbitral remedies. The financial burden of the affected parties is lifted by the third-party funder, who provides financial support to one of the parties involved in the arbitration process (typically the claimant) in exchange for a portion of any financial award that may be obtained. This is particularly beneficial for parties who may have meritorious claims but lack the financial resources to pursue them.¹Despite its potential to increase access to justice, TPF faces challenges in Nigeria, including legal uncertainty, enforceability concerns, and cultural barriers. This research evaluates the current arbitration landscape in Nigeria, assessing the viability of TPF as a means to expand access to arbitration. This study identifies key opportunities for TPF to enhance access to arbitration in Nigeria. However, it also reveals significant challenges that must be addressed to ensure the successful adoption of TPF. Based on the findings, strategic recommendations are provided to stakeholders, including policymakers, arbitration institutions, and potential funders, to harness the benefits of TPF and promote greater access to arbitration in Nigeria. By addressing these challenges and leveraging opportunities, TPF can play a vital role in expanding access to arbitration in Nigeria, contributing to a more inclusive and effective dispute resolution landscape.