Publication: The New Nigerian Law on Funding Third-Party Arbitration

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Third-Party Funding of arbitration (“Funding”) is an arrangement where a third-party (“Funder”), with no prior interest in an investment or commercial dispute, provides financial support to one of the parties engaged in the dispute resolution, in return for a share of the eventual proceeds of the award, if any.

The usual structure is that the Funder provides the named party with the funds to prosecute or defend the arbitral proceedings, on the understanding that, out of the proceeds of recovery in the arbitration, the Funder would, first, recover its outlay, and, next, share in the rest of the proceeds (if any).

Until recently, there was much to be said for the view that the practice of Funding commercial or investment dispute resolution was prohibited in Nigeria. However, with the enactment of the Arbitration and Mediation Act 2023 (“AMA”), Funding is now statutorily permitted. In this article, our Senior Associate Ayodeji Adeyanju, and Associate Yusuf Owolabi analyse this new framework for Funding in Nigeria. They highlight the benefits of Funding, some key concerns of the practice and a review of the application of the practice in two arbitration hubs outside the Western world – Hong Kong and Singapore.

Read here: https://lnkd.in/dyRWJKeZ

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