Journal of Research and Development Vol. 2, No.

1, 2014

CUSTOMARY AND MODERN ARBITRATION IN NIGERIA: A

RECYCLE OF OLD FRONTIERS

BELLO, Adesina Temitayo (PhD)

Abstract
This article reveals the existence of customary arbitration in Nigeria prior to the introduction of
the adversarial system of resolving disputes by the British colonial masters. Customary
arbitration which involves an arbitral proceeding conducted under the generally acceptable
norms, customs and traditions of the people in a particular community has being widely
contested through a plethora of cases of its existence in Nigerian jurisprudence. This article
shows that certain conditions must be met before an arbitration conducted under customary law
would be held as valid. Owing to the evolution of the world and certain shortcomings associated
with customary arbitration, modern arbitration took the stage in bid of making arbitration an
essential alternative in resolving disputes. Through the enactment of statute, rules, regulations
and establishment of arbitration centres in Nigeria modern arbitration recycled customary
arbitration for the benefit of mankind.
Keywords: Customary Arbitration, Modern Arbitration, Customs, Traditions, Nigeria.
Introduction
Before the advent of the Arbitration and Conciliation Act which serves as the principal statute
regulating arbitration practice in Nigeria, arbitration was conducted in accordance with the
customs and traditions of people. Arbitration had been with various indigenous communities in
Nigeria prior to the introduction of litigation1. It is imperative to assert that the belief that
arbitration is of recent development in Nigeria is misleading. There exists a voyage of decided
cases validating the existence of arbitration prior to colonialism.
England in the course of colonizing Nigeria brought the adversarial system as a way of settling
disputes. However, this system has been plagued with certain factors such as technical
procedures, unwarranted delays in the dispensation of justice, cost inefficiency etc. thus
discouraging disputants to settle their differences through litigation. This brought about concerns
of reforming customary arbitration by enacting relevant statutes and rules that will serve as a


Lecturer I Department of Private and Commercial Law, Babcock University School of Law and Security Studies
Iperu-Remo Ogun State Nigeria
1
Gadzama J.K. (2004): Inception of ADR and Arbitration in Nigeria. A paper presented Nigerian Bar Association
Abuja http://www.gadzama.com/index.php?s=3 accessed August 11, 2014

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 Journal of Research and Development Vol. 2, No.1, 2014

‘legal backing’ for arbitration, hence making it possible for disputes to be settled in a flexible,
time efficient and cost effective manner.
Arbitration is the process of resolving a dispute between at least two parties who through an
agreement agree to submit their dispute to arbitration, appoints a third party who shall decide on
their dispute and such decision shall be final and binding on the parties. This paper undertakes to
ascertain the credibility of customary arbitration in Nigeria as well stating relevant laws that
brought about modern arbitration in Nigeria.
Arbitration
Prof. (Dr.) J Olakunle Orojo CON and Prof. M. Ayodele Ajomo defines arbitration in the
following manner:
‘Arbitration is a procedure for the settlement of disputes,
under which the parties agree to be bound by the decision
of an arbitrator whose decision is, in general, final and
legally binding on both parties.’2
Halsbury’s Laws of England see arbitration as:
‘the process by which a dispute or difference between two
or more parties as to their mutual legal rights and
liabilities is referred to and determined judicially and with
binding effect by the application of law by one or more
persons (the arbitral tribunal) instead of by a court of
law.’3
Furthermore Rene David4 defined arbitration as a device whereby the settlement of a question,
which is of interest for two or more persons, is entrusted to one or more other persons – the
arbitrator or arbitrators – who derive their powers from a private agreement, not from the
authorities of a State, and who are to proceed and decide the case on the basis of such agreement.
Arbitration can be simply be defined as a consensual procedure in which there is a form of
intervention by a neutral third party in dispute between two others.
The advantages and characteristics of arbitration often times overlap but the most significant
thing of note is party autonomy. Arbitration is a party-driven process, as they decide the number
of arbitrator, the seat of arbitration, the language to be used throughout the procedure, the law
applicable etc. This essentially makes the arbitral procedure flexible, less technical and
expeditious.
Customary Arbitration
Customary arbitration can be seen a procedure for settling disputes conducted in accordance with
the customs and traditions of the people. However, through decided cases, one will be able to
grasp and fully understand the meaning and dynamics of customary arbitration. In the case of
Ohiaeri v Akabueze5, the Supreme Court adopting the definition of customary arbitration as
proffered by the Supreme Court in the case of Agu v Ikewibe6 as:
‘An arbitration in dispute founded on the voluntary
submission of the parties to the decision of the arbitrators

2
Orojo Olakunle .J. and Ajomo Ayodele M. (1999): Law and Practice of Arbitration and Conciliation in Nigeria,
Lagos: Mbeyi & Associates (Nig.) Ltd.
3
Halsbury’s Laws of England (1999) 4th Ed. Butterworths para. 601,332.
4
Rene David (1985): Arbitration in International Trade, Netherlands: Kluwer Law and Taxation Publishers p. 5
5
(1992) 2Nigerian Weekly Law Report part 221 1at 7
6
(1991) 3 Nigerian Weekly Law Report (NWLR) part 180 at 385

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 Journal of Research and Development Vol. 2, No.1, 2014

who are either the chiefs or elders of their community, and

the agreement to be bound by such decision or freedom to
resile where unfavourable.’
In Ufomba v Ahucahoagu7, customary arbitration described as:
‘A customary arbitration is essentially a native
arrangement by selected elders of the community who is
vast in the customary law of the people and takes decision,
which are mainly designed or aimed at bringing some
amicable settlement, stability and social equilibrium to the
people and their immediate society or environment.’
According to T.O. Elias:
‘It is well accepted that one of the many African customary
modes of settling disputes is to refer the dispute to the
family head or an elder or elders of the community for a
compromise solution based on the subsequent acceptance
by both parties of the suggested award, which becomes
binding only after such signification of its acceptance, and
from which either party is free to resile at any stage of the
proceedings’ 8
It is evident from the above that customary arbitration involves the voluntary submission of
disputants absent any written agreement to arbitration in which the arbitral panel shall consist of
chiefs and elders who have unrivaled knowledge in customary law and tradition, resolve the
disputes between the parties. Decisions emanating from customary arbitration are enforced by
the courts. In Asampong v. Kweku Amuaka9 Dean C.J. asserted that:
“…When matters in dispute between parties are by mutual
consent investigated by arbitrators at a meeting held in
accordance with native law and custom and decision given,
it is binding on the parties and the Supreme Court will
enforce it ”
In addition Karibi Whyte JSC in Egesimba v Onuzurike10 was of the view that:
‘Where a body of men be they chiefs or otherwise, acts as
arbitrators over a dispute between two parties their
decision shall have binding effect, if it is shown firstly, that
both parties submitted to the arbitration, secondly that the
parties accepted the terms of the decision, such decision
has the same authority as the judgment of judicial body and
will be binding on the parties and thus create an estoppels’
However, the case of Okpuruwu v. Okpokam11 is notably instructive as it rejects the existence of
customary arbitration in Nigeria. Uwaifo JCA delivered that:
‘To talk of customary arbitration having a binding force as
a judgment in this country is therefore somewhat a

7
(2003) 4 SC part II 65 at 90
8
Elias Olawale Taslim (1956): The Nature of African Customary Law, England: Manchester University Press, p. 212
9
(2003) 4 SC part II 65 at 90
10
(2002) 9-10 SC 1 at 19
11
(1988) 4 NWLR (part 90) 554

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 Journal of Research and Development Vol. 2, No.1, 2014

misnomer and certainly a misconception. Of course, to say

that a decision by such a body creates res judicata is
erroneous…I do not know of any community in Nigeria
which regards the settlement by arbitration between
disputing parties as part of its native law and custom. It
may be that in practical life, when there is a dispute in any
community, the parties involved may sometimes decide to
refer it to a disinterested third party for settlement. That
seems more of a common device for peace and good
neighbourliness rather than a feature of native law and
custom, unless there is any unknown to me which carries
with it ‘judicial function’ or authority as in Akan laws and
customs. I do not also know how such a custom, if any, or
more correctly, such a practice, to get a third party to
intervene and decide a dispute can elevate such a decision
to the status of a judgment with a binding force and yet fit it
into our judicial system…I say by way of emphasis that we
have no equivalent of Akan laws and customs in this
country under which elders of the same description in
Ghana’s circumstances perform recognized judicial
functions consistent with our judicial system.’
His lordship took account of Inyang v Essein12 as well as Ozo Ezejieofor Oline & Ors v Jacob
Obodo & Ors13 in reaching his conclusion that courts in Nigeria in a number of times denied the
fact that customary arbitration indeed existed and can be pleaded as res judicata. However in
Odonigi v Oyeleke14 the Supreme Court held that:
‘The decision of the Court of Appeal in Okpuruwu v
Ekpokam that our legal system does not recognize the
practice of elders or natives constituting themselves as
customary arbitration to make binding decisions between
parties in respect of land or other disputes cannot in cases
be correct.’
It is imperative to assert that the denial of the existence of customary arbitration in Nigeria is
disheartening. Taking account of the practice in the ancient Benin empire, where arbitration and
mediation was the sole means of resolving disputes before the advent of the adversarial system.
Odionwere who was the village head and heads of the different families who held titles as
Okaegbe functioned as arbitrators or mediators in resolving disputes among people of the Benin
Empire. In addition chiefs would be called upon by the Oba of Benin to mediate or reconcile
differences between neighbouring villages’ sequel to the request of the villagers 15. Arbitration
was not only practiced in the Benin Empire but across all ethnic groups in Nigeria. Even
Holdsworth maintains that:
‘the practice of arbitration therefore, comes, so to speak,
naturally to primitive bodies of law, and after courts have

12
(1957) 2 FSC 39
13
(1958) 3 FSC 84
14
(2001) 6 NWLR [pt. 708] p 27-28 para. G-A
15
Akpata Ephraim (1997): The Nigerian Arbitration Law in Focus, Lagos: West African Book Publishers Ltd.

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 Journal of Research and Development Vol. 2, No.1, 2014

been established by the state and a recourse to them has

become the natural method of settling disputes, the practice
continues because the parties to a dispute want to settle
them with less formality and expense than is involved in a
recourse to the courts’16.
The Quran upholds arbitration which by analogy suggests that the ancient northern Nigerian
practiced customary arbitration. It states that:
‘If two parties among the believers fall into quarrel make
you peace between them…make peace with justice and be
fair for God loves those who are fair and just17. If you fear
a breach between them twain appoint one from his family
and one from hers18 if they wish for peace God would
cause their reconciliation for God had full knowledge and
is well acquainted with all things’19.
Essential Validity of Customary Arbitration
Customary arbitration is said to valid upon fulfillment of certain conditions. Owing to the fact
that during the ancient period not everyone or to say the least everyone do not understand a
writing agreement. In bid of making the submission of the disputing parties to arbitration, certain
ingredients must present. In the case of Okereka v Nwanko20 these conditions include:
1. If the parties voluntarily submit their dispute to non-judicial body
2. The indication of the willingness of the parties to be bound by the decision of the
non-judicial body or a freedom to reject the decision where not satisfied
3. That neither of the parties has resiled from the decision so pronounced.
In Egbesimba v Onuzuike21, the justices of the Supreme Court started the ingredients which must
be present to give customary arbitration validity. Ayoola JSC declared that:
‘The four ingredients usually accepted as constituting the essential characteristics of a binding
arbitration are:
1. Voluntary submission of the dispute to the arbitration of the individual or body
2. Agreement by the parties either expressly or by implication that the decision of the
arbitrators will be accepted and binding
3. That the arbitration was in accordance with the custom of the parties
4. That the arbitrators reached a decision and published their award.’
Ogundare JSC22 was of the view that:
‘For a customary arbitration to be valid, it must be shown:
1. That parties voluntarily submit their disputes to their elders or chiefs as the case may
be for determination;
2. That there is an indication of the willingness of the parties to be bound by the
decision of non-judicial body or freedom to reject the decision where not satisfied;
3. That neither of the parties has resiled from the decision so pronounced.’

16
Holdsworth William (1964): History of English Law, Vol. XIV London: Methuen p. 187
17
Quran 4 v. 35
18
Emphasis mine; this suggest the appointment of arbitrators
19
Ibid, Quran 49 v. 9
20
(2003) 4 SC Pt. I 16 at 29
21
(2002) 15 NWLR [Pt. 791] p. 466
22
Ibid

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 Journal of Research and Development Vol. 2, No.1, 2014

Furthermore Tobi JSC23 set out the following ingredients:

1. That there has been a voluntary submission of the subject-matter in dispute to an
arbitration of one or more persons;
2. That it is agreed by the parties, either expressly or by implication, that the decision
of the arbitrators will be accepted as final and binding;
3. That the said arbitration was in accordance with the action of the parties or their
trade or business;
4. That the arbitrators reached a decision and published their award;
5. That the decision or award was accepted at the time it was made
Customary arbitration will be held to be valid after the fulfillment of the above-mentioned
conditions. Failure to meet with these conditions will be tantamount to a nullity of the arbitral
process.
Modern Arbitration
With the advent of the adversarial system of resolving disputes, certain shortcomings of
customary arbitration, led to the emergence of reforming customary arbitration and developing
arbitration in itself. In Nigeria the first statue to be enacted on arbitration law was the Arbitration
Ordinance 1914 modeled based on the English Arbitration Act 1889. It was later re-enacted as
the Arbitration Ordinance 1958 24. This ordinance was in force until in 1988 when Nigeria
adopted the United Nations Commission on International Trade Law (UNCITRAL) Model law
on International Commercial Arbitration25 and the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards 1958, thereby enacting the Arbitration and Conciliation
Decree 198826. This decree was largely significant as it provided for rules governing
international and domestic arbitration and made provisions for conciliation, which was not
present in the Arbitration Ordinance of 1958.
On the transition from a military regime to a democratic setting, the Arbitration and Conciliation
Decree became an Act27 codified under the Laws of the Federal Republic of Nigeria. This Act
has refined customary arbitration in Nigeria. Under section 1 of the Act it provides that:
‘Every arbitration agreement shall be in writing contained:
(1) (a) in a document signed by the parties; or (b) in an
exchange of letters, telex, telegrams or other means of
communication which provide a record of the arbitration
agreement; or (c) in an exchange of points of claim and of
defence in which the existence of an arbitration agreement
is alleged by one party and denied by another (2) Any
reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement if
such contract is in writing and the reference is such as to
make that clause part of the contract.’
Major emphasis is placed on a written agreement evidencing the consensus ad idem of the parties
to submit their dispute to arbitration. Customary arbitration which is based on oral submission to
arbitration brings with it the problem of certainty and enforcement. Where there is no initial

23
Ibid
24
CAP 13 Laws of the Federation of Nigeria and Lagos 1958
25
1985
26
No 11 of 1988
27
Arbitration and Conciliation Act (ACA) 1988 CAP A18 Laws of the Federation of Nigeria 2004

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written agreement, the decision of the arbitrator has no binding effect on the parties, as either of
disputing parties is at liberty to accept or reject the award at the time it was made. In Awosibe v
Sotunbo28 it was held that owing to the fact that the dissatisfied party filed a writ of summons, it
showed a positive demonstration that he never believed there was a binding arbitration and his
abandonment of the gentlemen’s agreement reached between them.
Modern arbitration takes a different dimension on the matter abovementioned. Once the
disputing parties through a written agreement submitted their dispute to arbitration, that
agreement is binding on those parties and any decision made by arbitrators appointed by parties
shall be final and binding. The award will create an estoppel and operate as ‘res judicata’ with
regard to matters with which the award dealt with, hence preventing either party from
abandoning the award or pursuing such matters dealt with in the award in litigation29. It becomes
better as Section 31 (1) of the Arbitration and Conciliation Act (ACA)30 provides that:
‘An arbitral award shall be recognized as binding and
subject to this section 32 of this Act, shall, upon application
in writing to the court, be enforced by the court’
Hence the award would be enforced in the same manner as a judgment or order of a court. This
significantly recycles the mode of procedure in customary arbitration. Also, judicial assistance is
rendered here as the court helps in enforcing an award. In Ras Pal Gazi Constuction Company
Ltd. v Federal Capital Development Authority31 it was held that:
‘An award made pursuant to Arbitration proceedings
constitutes a final judgment on all matters referred to the
arbitrator. It has a binding effect and it shall upon
application in writing to the court, be enforced by the
court…’
Furthermore, New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards marks a significant recycle of customary arbitration. The Arbitration and Conciliation
Act (ACA)32 adopting Article 1 of the Convention enshrined it in its Article 54. Article 1 of the
New York Convention stipulates thus:
‘This Convention shall apply to the recognition and
enforcement of arbitral awards made in the territory of a
State other than the State where the recognition and
enforcement of such awards are sought, and arising out of
differences between persons, whether physical or legal. It
shall also apply to arbitral awards not considered as
domestic awards in the State where their recognition and
enforcement are sought’33.
Section 54 states that:
‘Without prejudice to section 51 and 52 of this Act, where
the recognition and enforcement of any award arising out

28
(1992) 5 NWLR (pt. 243) 514
29
See Fidelitas Shipping Co. Ltd v V/O Exportchleb (1965) 1 Lloyd’s Rep. 223, C.A.
30
Ibid
31
(2001) 10 NWLR (pt. 722) p. 559 at 562 para. 3
32
Ibid CAP A18 Laws of the Federation of Nigeria (LFN) 2004
33
New York Convention 1958 http://www.euro-arbitration.org/resources/en/nyc_convention_en.pdf. Accessed
August 18, 2014

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 Journal of Research and Development Vol. 2, No.1, 2014

of an international commercial arbitration are sought, the

Convention on the Recognition and Enforcement of
Foreign Awards (hereafter referred to as “the
Convention”) set out in the Second Schedule to this Act
shall apply to any award made in Nigeria or in any
contracting state:
a. Provided that such contracting state has reciprocal
legislation recognising the enforcement of arbitral awards
made in Nigeria in accordance with the provisions of the
Convention;
b. That the Convention shall apply only to differences arising
out of legal relationship which is contractual.’
Hence if the award is made in Britain and one of the disputant is a Nigerian who won against the
other party who perhaps is a Briton, the Nigerian can enforce that award in Nigerian courts
against the other party in light of the New York Convention. Customary arbitration does not
involve international commercial arbitration or recognizing decisions that were under different
norms, customs and traditions of a particular community to be enforced under another
community’s custom and tradition.
In addition, with the emergence of arbitration centres in Nigeria, customary arbitration is
recycled. There was nothing like an arbitration centre in ancient times that would be charged
specifically with facilitating arbitration. These arbitration centres assist in the facilitation of
arbitral proceedings coupled with resolving disputes through their own rules. Some of these
Centres include:
1. Lagos Multi-Door Courthouse
2. Abuja Multi-Door Courthouse
3. Chartered Institute of Arbitrators UK (Nigerian Branch)
4. Lagos Regional Centre for International Commercial Arbitration
5. The International Chamber of Commerce (Nigerian National Committee)
6. Lagos Court of Arbitration
Conclusion
The act of referring a dispute to a third party who is chosen by the disputing parties themselves
and agreeing to be bound by the decision rendered by that third party is known as arbitration.
Justices of the Supreme Court, writers, scholars etc. have argued on the existence of arbitration at
the customary law level prior to the emergence of litigation in Nigeria. Through a plethora of
cases, customary arbitration has being held to be far in existence which was conducted in
accordance with accepted norms, customs and traditions of people of a specific community.
Chief, elders, family heads have being considered to make up the arbitral panel. It derives its
essential validity on the fulfillment of certain conditions such as voluntary submission, arbitral
proceedings conducted in accordance with the customs and traditions of the people, disputants
have not resiled from the decision etc. which will make the courts to recognize it as a valid
customary arbitration.
However, owing to certain shortcomings and the evolution of the world, there was the need for a
modern arbitration. Through the enactment of statues, institutional rules and regulations, modern
arbitration recycles customary arbitration in significant aspects despite retaining significant
tenets of arbitration such as consent of parties and party autonomy. Arbitration in its modern

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context aims at creating certainty and making people perceive arbitration as a viable tool in
resolving disputes even in the most complex scenarios.

References
David R. (1985): Arbitration in International Trade, Netherlands: Kluwer Law and Taxation
Publishers
Elias T.O. (1956): The Nature of African Customary Law, England: Manchester University
Press,
Ephraim A (1997): The Nigerian Arbitration Law in Focus, Lagos: West African Book
Publishers Ltd
Gadzama J.K. (2004): Inception of ADR and Arbitration in Nigeria. A paper presented Nigerian
Bar Association Abuja http://www.gadzama.com/index.php?s=3 accessed August 11, 2014

Halsbury’s Laws of England (1999) 4th Ed. Butterworths

Holdsworth W. (1964): History of English Law, Vol. XIV London: Methuen
New York Convention 1958 http://www.euro-
arbitration.org/resources/en/nyc_convention_en.pdf. Accessed August 18, 2014
Orojo O. J. and Ajomo A. M. (1999): Law and Practice of Arbitration and Conciliation in
Nigeria, Lagos: Mbeyi & Associates (Nig.) Ltd.

58