Abstract
Third-party funding which refers to the financing of a claim by a party unconnected to the dispute in return for financial gain – typically, a share of the damages if the claim succeeds, is becoming popular in many arbitral jurisdictions and centers globally, and Nigeria is not an exception. In this paper, the prospects and challenges associated with third-party funding in arbitration in Nigeria in the wake of the just-passed (Arbitration and Mediation Bill 2022) awaiting presidential assent are examined. To effectively deal with this, a literature review and comparative review methodology were adopted. The concept of third-party funding as well as its introduction in Nigeria as provided by the Bill 2022 is discussed. Furthermore, the expected challenges with third-party funding in Nigeria when the Bill comes into effect are examined. The Hong Kong and Singaporean situation is examined while looking at their provisions that make third-party funding operational in those Jurisdictions. The paper highlighted challenges regarding issues of confidentiality and disclosure as well as conflicts of interest and; Issue of non-regulation of third-party funding in Nigeria-seated arbitration proceedings as some of the expected barriers to third-party funding in Nigeria should the Bill be signed into law. These issues were however expressly dealt with in Hong Kong and Singapore as such lessons can be learned from them. The paper concludes by stating that no doubt Third-Party funding will become more prevalent if the Bill recently passed by the Nigerian Senate will be assented to by the President as soon as possible to pave way for the application of Third-party funding in Nigeria with its prospects. However, while we look forward to this happening soon, a clue could be taken from Hong Kong and Singapore to enable Nigeria to deal with future challenges or barriers in order to implement a hitch-free Third-Party Funding Regime.
Keywords: Arbitration, Challenges, Hong Kong, Nigeria, Prospects, Singapore, Third-Party Funding