Nigeria - Part II Country Report - Handbook on Third-Party Funding in International Arbitration
Originally from Handbook on Third-Party Funding in International Arbitration
1.1. TPF Regime in Nigeria
Funding of associated costs of dispute resolution, particularly in the private-driven adjudicatory model, exemplified in Arbitration, has remained understudied. The general notion that Arbitration is a cheaper dispute resolution model is only on the econometrics of the cost (time-cost ratio) not on actual cost in terms of money spent by parties in Arbitral proceedings. Parties to Arbitral proceedings bear several costs, which include the fees of arbitrators, legal representation, administrative charges and other sundry expenses. Cost is therefore, an essential aspect of access to justice and a major consideration in choice of arbitration for dispute resolution. A party who does not have sufficient funding of necessary costs to prosecute or defend arbitral proceedings may shy away from the process and invariably abandon the potential legal success of justice or become a victim of injustice for failure to defend an otherwise meritorious proceedings. This challenge is more pronounced in international arbitration, which involves different national or issues of national interests.
Whether a party would be assisted by way of Third-Party Funding (TPF) arrangements for the financing of international arbitrations have become an issue worthy of considerable analysis to streamline diverse legal issues arising from its operation. Several associated legal issues arising from utilization of Third-Party Funding arrangement, would be discussed, which include: the legal support for its use in different jurisdictions?, the practice of third-funding; whether it is dominated by local or international funders?, regulation of Third-Party Funders; whether there are guiding statutes or case law?, legal restrictions in terms of its relationship with common law concept of champerty, cost regime and other related ethical consideration?