THIRD-PARTY FUNDING IN ARBITRATIONS IN NIGERIA: A NEW REGIME UNDER THE ARBITRATION AND MEDIATION ACT, 2023
- Introduction
Access to justice is a basic principle of the rule of law, which describes the ability of any person, regardless of income, to use the legal system to advocate for themselves and their interests. The cost of prosecuting a matter either using the litigation or arbitration mechanisms has over the years transcended the pocket of the common man and would require a sponsor or a third party to advocate their rights and/ or interests. However, third parties are prohibited from sponsoring or providing funds to either prosecute or defend an unconnected party’s action under the common law doctrine of ‘maintenance and champerty’.
Third-party funding has become a common discourse in international and domestic arbitration. However, prior to the enactment of the Arbitration and Mediation Act (AMA), 2023 the concept of third-party funding of arbitral proceedings in Nigeria was far-flung and an unattainable dream. Third-party funding was not applicable to arbitrations conducted in Nigeria because of the common law doctrine of the torts of maintenance and champerty. However, the enactment of the AMA changed the above regime, with the abolition of the torts of maintenance and champerty in Section 61 of the AMA.
This article seeks to examine third-party funding of arbitral proceedings pre and post the AMA, the abolition of the common law doctrine of champerty and maintenance, and the challenges and prospects under the new regime in Nigeria.
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