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Nigerian News » Politics

‘Arbitration a better option in real estate dispute’

As urbanisation increases and the size, value and complexity of real estate developments rise, the potential for disputes heightens. In particular, real estate developments are increasingly involving provision of key infrastructure such as power, water and roads. Real estate projects involve many parties including investors, lenders, construction firms, materials suppliers and the purchasers, who may be businesses or individuals.

Arbitration is a means of resolving disputes in a fast, efficient, cost-effective and confidential manner.

One key advantage of arbitration is parties can choose arbitrators with experience in the real estate sector. This means that the parties’ dispute will be determined by someone, who can bring to bear his expertise in understanding and deciding the matters in dispute.  This can lead to a more efficient process and be helpful, particularly regarding issues that are technical or relate to industry practice.

Another advantage of arbitration is parties can determine, to a large extent, how they want the proceedings to be handled whereas court proceedings are conducted in accordance with court rules.  In the context of an ongoing real estate development project, it may be necessary for a dispute to be resolved quickly so that work on the project can continue. Arbitration enables the parties to agree to put in place procedures to ensure that an award is made quickly to prevent a dispute from derailing the project.

Does Nigeria have trained personnel to handle arbitration?

There are many leading arbitration lawyers in Nigeria. Many of these lawyers have experience of arbitrations in the oil and gas sector, where arbitration is the preferred means for resolving disputes.  There is a false perception that it is only used in resolving oil and gas disputes, this, however, is not the case, as arbitration is constantly evolving and is increasingly common in other sectors.

The recent creation of the Association of Young Arbitrators (AYA) Nigeria, also shows that Nigeria is investing in promoting arbitration among young, up-and-coming lawyers. AYA is an organisation established by young Nigerian lawyers to facilitate mentoring, knowledge sharing and training of the next generation of arbitration lawyers in Nigeria. The Lagos Court of Arbitration has also offered arbitration training to Nigerian lawyers for a number of years.

How can the concept of arbitration be related to real estate?

When people talk about Arbitration, they are often referring to mediation.  Unlike in court or an arbitration, in mediation there is no final and binding judgment.  Instead, the mediator’s role is to seek to facilitate the parties reaching agreement on a final settlement.  The mediator’s role is to help show the parties how they can reach a win-win solution by helping them evaluate the strength and weaknesses of their cases to reach a fair and mutually acceptable outcome.  A key advantage of mediation is that it is faster and cheaper than litigation or arbitration.

To what extent is the outcome of arbitration legally binding on other parties in real estate issues?

Arbitration results in an award which the parties agree is final and binding, subject to any rights of appeal provided for by law.  Courts will usually enforce arbitration awards provided that the arbitration was conducted fairly and in compliance with the parties’ agreement to arbitrate.

What other means are available for real estate dispute resolution?

If the parties do not wish to use mediation or arbitration to resolve real estate disputes then these would usually end up in court litigation.

Court litigation can be expensive and it can take a long time get to a final judgment, particularly if the case goes all the way through the appeals process.

Adoption of arbitration in real estate disputes is a great opportunity in Nigeria. It takes pressure off the courts, and Nigeria definitely has the infrastructure for it, with high-calibre lawyers experienced in arbitration, and arbitral institutions like the Lagos Court of Arbitration. Arbitration has a broader role in resolving not only real estate disputes, but shipping and other commercial disputes, and Nigeria is well placed to capitalise on this.
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