HYBRID MODELS IN COMMERCIAL DISPUTE RESOLUTION: OPPORTUNITIES AND CHALLENGES IN COMPLEX CASES | Ajiboye Nathaniel Adebayo

PREAMBLE

Imagine a construction project in Lagos, with five contractors, each from different jurisdictions. A dispute arises over delays and cost overruns. In one of the situations, the arbitration clause kicks in but halfway through the parties realize that they need some sort of interim judicial relief to freeze assets, and at the same time exploring mediation as a way to preserve commercial relationships. By the time the arbitral tribunal is prepared, the dispute has splintered into other court arbitration and mediation proceedings, each proceeding at its own speed, costing each millions[1]. The attempt to create order is yet another site of war.

This is where hybrid models of dispute resolution hold the most promise. Hybrids offer a flexible and less expensive means of coping with the increasing complexity of commercial transactions by incorporating the strengths of litigation, arbitration, mediation and expert determination. Yet, while these models are the future of dispute resolution, these models also raise thorny legal and procedural questions about enforceability, fairness and compatibility with existing legal frameworks.

This essay explores the potential and the pitfalls of hybridizations, particularly, whether hybridization is a viable prospect within Nigeria’s developing dispute resolution marketplace.

 

NATURE OF HYBRID MODELS IN DISPUTE RESOLUTION

Hybrid models are processes that blend two or more forms of dispute resolution within one process, either occurring sequentially or simultaneously, in order to improve efficiency, fairness and enforceability. They are born out of the understanding that litigation, arbitration or mediation alone cannot respond to the needs of every dispute.

 Types of Hybrids

The hybrid ones have included the most recognized of these models:

1. Med-Arb: where mediation is attempted first, and if mediation fail, the case proceeds to arbitration.
2. Arb-Med-Arb: becoming popular in Singapore and Hong Kong, arbitration is initiated, mediation is attempted, and if mediation is unsuccessful, arbitration picks up where it left off.
3. Lit-Arb: courts and arbitral tribunals working in tandem, usually for interim measures, but also for recognition of awards, and joinder of non-signatories.
4. Multi-tier clauses: sometimes require negotiation → mediation → arbitration/litigation as a condition precedent to each step up the ladder.

 

Legal Recognition

Internationally, these models are backed up by instruments such as the UNCITRAL Model Law on International Commercial Arbitration[2], the New York Convention of 1958[3] and, more recently, the Singapore Convention on Mediation of 2019[4].

In Nigeria, the new Arbitration and Mediation Act 2023 (AMA) has made mediation and hybrid processes a central feature of the law, enabling for example, in Section 67, the enforceability of settlement agreements resulting from mediation[5]. The Act is consistent with international standards[6] and has provided Nigeria the opportunity to begin incorporating hybrid processes into its commercial dispute resolution culture[7].

 Opportunities of Hybrid Models in Complex Commercial Cases

The hybrid form of dispute resolution has a number of distinctive strengths, especially in a time when a commercial dispute has moved from a single linear dispute to rather a multi-factored potential conflict involving cross-border trade, digital assets, and technical partnerships.

1. Efficiency and Cost Effectiveness: One of the most lauded advantages of hybrid models like Med-Arb is the ability to blend the expediency of mediation with the finality of arbitration[8].
2. Flexibility for Complex, Multi-Party Disputes: Hybrid processes are very well suited to technical disputes involving multiple stakeholders. These hybrids enable parties to work through temporary complicating technical details in a non-adversarial way before they must enter into adversarial decision-making[9].
3. Preservation of commercial relationships: in Nigeria’s commercial ecosystem, networks and reputation are frequently more valuable than the contract itself, the hybrid process’s incorporation of mediation makes it possible for relationships to not be irreparably damaged[10].
4. Enforceability in International Frameworks: Nigeria, having ratified the 1958 New York Convention, subject to enforcement as an arbitral award is that Nigeria acceded to it in 1970. In addition, as the Singapore Convention on Mediation, which Nigeria has signed but not yet ratified, is expected to enter into force soon, mediated settlements may increasingly gain international enforceability[11].
5. Institutional Development and Nigeria’s Arbitration Hub Aspirations: Hybrid dispute clauses are increasingly being adopted in model rules by relevant institutions[12]. This makes Nigeria now positioned as the natural centre for the resolution of a Africa continent wide commercial disputes under AfCFTA giving local and foreign investors greater confidence with hybrid processes[13].

CHALLENGES OF HYBRID MODELS IN COMPLEX COMMERCIAL CASES

Although hybrid dispute resolution mechanisms can work enormously well, there are legal, cultural, and institutional barriers to hybrid dispute resolution in Nigeria and across Africa.

1. Concerns About Neutrality: On a scale of neutrality and role conflicts such as Med-Arb, the same individual is often criticised for being both mediator and arbitrator[14].
2. Absence of Clear Legislative Framework: AMA is silent on hybrid models, therefore, this legal uncertainty discourages parties from creating Med-Arb clauses in contracts with doubt about the legality and recognition provided by Nigerian courts[15].
3. Judicial Attitudes and Enforcement Risks: In recent years, some courts have been interventionist with arbitration. Without judicial buy-in, hybrid settlements may have resistance in enforcement[16].
4. Cultural Resistance and Awareness Gaps: Hybrid systems can be viewed as “experimental” or less legitimate. Lawyers often resist mediation stages, noting the impact they have upon professional fees. This cultural challenge remains the most daunting obstacle to hybrid adoption[17].

 

Judicial and Practical Considerations for Nigeria

There are some judicial and practical realities that must be grappled with, for hybrid systems to flourish as part of the Nigerian dispute resolution landscape. AMA has established the paradigm of ADR as modern, but it is mute on hybrids and thus leaves much room for judicial creativity and legislative tweaking.

1. The Role of the Nigerian Judiciary

The courts remain the arbiters of enforceability. It follows that Nigerian judges must:

• Recognize Med-Arb/Arb-Med Clauses as Enforceable: In Mekwunye v. Imoukhuede, the Court reaffirmed the sanctity of arbitration agreements, but said nothing about hybrids[18]. A progressive attitude that extends this deference to Med-Arb clauses is crucial.
• Ensure Confidentiality Protections: Courts must develop jurisprudence to allay parties concerns that confidential mediation disclosures could taint arbitration. Comparative practice from the Hong Kong courts who require written waivers prior to a mediator being able to act as an arbitrator provides a workable Nigerian adaptation[19].

 

2. The Legislature and Hybrid Gaps

AMA, though a positive development in this respect, does not codify these hybrid models. A future amendment could look to:

• Singapore’s Med-Arb framework that explicitly provides rules for the transition from mediation to arbitration[20].
• China’s CIETAC Arbitration Rules re-institutionalize Arb-Med-Arb as a dominant path, demonstrating the success of hybrids when they supported by legislation[21].
• Codification would provide certainty to parties and courts and would incentivize corporate actors to use these clauses in contracts.

Comparative Insights and Global Lessons

The various jurisdictions that have tried Med-Arb, Arb-Med and Arb-Med-Arb contain lessons that Nigeria can learn from in bolstering her commercial dispute resolution landscape.

1. Singapore: Institutional Innovation

Singapore is at the forefront of hybrid processes internationally, primarily because of the Arb-Med-Arb Protocol (2014) it has established by collaboration between the Singapore International Arbitration Centre (SIAC) and the Singapore International Mediation Centre (SIMC). Within this system:

• Arbitration is initiated, only to be diverted to mediation.
• If mediation succeeds, the settlement can be transformed into a consent award that is enforceable under the New York Convention (1958).
• In case the mediation does not succeed, arbitration will continue where it left[22].

 

2. China: Cultural and Institutional Acceptance

In China Arb-Med is embedded in the rules of the China International Economic and Trade Arbitration Commission (CIETAC). Arbitration cases regularly recommend mediation. If the mediation is successful, the result can be recorded as an arbitral award.

China’s success is underpinned by two factors:

• A cultural Confucian bias towards harmony and compromise[23].
• State support in the form of legal and institutional frameworks.

 

3. Hong Kong: Judicial Caution

The courts in Hong Kong, in particular, have taken a more conservative approach when it comes to neutrality issues in Med-Arb. In Gao v. Keeneye, the court disallowed a Med-Arb settlement award because the mediator/arbitrator had obtained confidential information during the mediation process that interfered with his neutrality[24].

4. European Union: Encouraging but Fragmented

ADR is also promoted at the EU level through the European Directive on Mediation (2008/52/EC), which encourages courts and other institutions to refer cases to mediation. But, the EU has not cemented hybrid models into the region, it is still left to the individual member states.

5. United States: Pragmatism in Hybrids

Med-Arb in the United States is becoming more popular in labor disputes and complicated commercial disputes. Court supervised settlements, such as those in United States v. Miami exemplify this combination of mediation and enforceable adjudication[25].

 Lessons for Nigeria

AMA provides a timely legal umbrella that can accommodate the embedding of hybrid models. But, global lessons need to be translated into practice within Nigeria:

• From Singapore

As Singapore has done, Nigeria may consider incorporating Arb-Med-Arb into the various rules and regulations of its institutions, starting with the oil & gas, maritime, and fintech disputes where there is a strong need for cross-border enforceability.

• From China

Just as in the Arb-Med model[26], it is generally elders who fill the role of mediator and judge in Yoruba and Igbo conflict resolution.

The AMA can build on this by formally incorporating community mediation practices into institutional ADR and ensuring enforceability.

• From Hong Kong

The Gao Haiyan case warns against impartiality risks where the mediator become arbitrator. The Nigerian government can prevent this by: Amending institutional rules to require written consent from parties before a mediator can act as an arbitrator in the same dispute.

 RECOMMENDATIONS FOR NIGERIA

The potential for hybrid solutions to the resolution of commercial disputes lies in a joint undertaking by institutions.

1. Judiciary

• Develop Precedent on Hybrids: Just as in United World Ltd v. MTS Ltd, courts have upheld the autonomy of the arbitral process, they should also explicitly grant the same recognition they give to consent awards achieved through arbitration to those achieved through mediation[27].
• Issue Practice Directions: Like the Federal High Court (Civil Procedure) Rules, old practice directions could be introduced to aid in recognition and enforcement of hybrid outcomes.
• Training Judicial Officers

 

2. Legislature

• Codify Arb-Med-Arb Procedures: Similar to Singapore, the National Assembly should pass additional regulations strictly addressing Arb-Med-Arb procedures to provide clarification about neutrality and enforceability.
• Sector-Specific Hybrid Rules: Laws regulating maritime (NIMASA Act), oil and gas (Petroleum Industry Act)[28], and fintech could expressly provide for hybrid dispute resolution for sectoral disputes.
• Budgetary Support

3. Executive

• Policy Framework: The Federal Ministry of Justice can publish a National ADR Policy in which Arb-Med-Arb is made compulsory for federal contracts of a certain value.
• Capacity-Building
• Public-Private Partnerships: the executive can promote PPPs to fund ADR centres with hybrid panels in order to lessen the backlog resulting from government related disputes.

4. Private Enterprises

• Insert Hybrid Clauses
• Support Institution Building
• Cost Saving Incentives

 

CONCLUSION

Commercial disputes are the lifeblood of economic life and the mode in which they are settled often determines economic life or death for businesses. Nigeria stands at a critical juncture, litigation has been too rigid, arbitration and mediation have offered alternatives but neither alone is sufficient for the complexity of the modern cross border commerce. The hybrid model, combining the certainty and finality of arbitration with the flexibility of mediation, provides a compromise which is consistent with international best practices and Nigeria’s own participatory and consensus-oriented culture.

If Nigeria dares to take action now, it will not only attract investor’s confidence but export dispute resolution expertise across Africa. In ten years, the Lagos Arb-Med-Arb Protocol could be as much a point of reference globally as the Singapore Convention is.

[1] Gary Born, International Commercial Arbitration (3rd edn, Kluwer 2021) 54

[2] UNCITRAL, Model Law on International Commercial Arbitration (2006, with amendments)

[3] New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958)

[4] United Nations, Singapore Convention on Mediation (2019)

[5] Arbitration and Mediation Act 2023 (Nigeria), s 67

[6] By ALF, “A Review of the Arbitration and Mediation Act 2023: Charting A New Course In Nigeria.– Alliance Law Firm” https://alliancelawfirm.ng/a-review-of-the-arbitration-and-mediation-act-2023-charting-a-new-course-in-nigeria/#:~:text=The%202023%20Act%2C%20according%20to,Nigerian%20alternative%20dispute%20resolution%20practice. accessed October 1, 2025

[7] “The Nigerian Arbitration and Mediation Act 2023: A Comparison with the Arbitration and Conciliation Act 2004 and Global Practices” (International Bar Association) https://www.ibanet.org/the-nigerian-arbitration-and-mediation-act-2023#:~:text=The%20enactment%20of%20the%20Arbitration,permitting%20third%2Dparty%20funding%20arrangements. accessed October 1, 2025

[8] Born, G., International Arbitration and Forum Selection Agreements (Kluwer Law 2021) 233

[9] Centre VM, “UNDERSTANDING HYBRID ADR ” (VIA Mediation Centre) https://viamediationcentre.org/readnews/ODM4/UNDERSTANDING-HYBRID-ADR accessed October 1, 2025

[10] OB Akinola: Mediation, Conciliation and the Construction Industry in Nigeria: Catalysts or Clogs? African Journal of Law, Ethics, & Education [AJLEE] Vol. 8, No. 3 (2025) https://ajleejournal.com [ISSN: 2756 -6870]

[11] United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention, 2019)

[12] such as the Lagos Court of Arbitration and the Nigerian Institute of Chartered Arbitrators

[13] Nigerian Institute of Chartered Arbitrators, Model Arbitration Rules 2023 (NICArb, Lagos)

[14] Stipanowich T, “‘Switching Hats’: Developing International Practice Guidance for Single-Neutral Med-Arb, ArbMed, and Arb-Med-Arb — International Mediation Institute” (International Mediation Institute, May 4, 2021) https://imimediation.org/2021/05/04/switching-hats-developing-international-practice-guidance-for-single-neutralmed-arb-arb-med-and-arb-medarb/#:~:text=Concerns%20Regarding%20Mixed%20Roles,to%20enforce%20a%20final%20award accessed October 1, 2025

[15] Arbitration and Mediation Act 2023 (Nigeria), esp. Parts I & III

[16] Mekwunye v. Imoukhuede (2019) 13 NWLR (Pt 1690) 439 (SC)

[17] Okorie C and Okorie K, “ALTERNATIVE DISPUTE RESOLUTION IN NIGERIA: ISSUES AND CHALLENGES” (unknown, April 12, 2024) https://www.researchgate.net/publication/379759340_ALTERNATIVE_DISPUTE_RESOLUTION_IN_NIGERIA_ISSUES_AND_CHALLENGES#:~:text=adjournments%2C%20and%20inadequate%20manpower%2C%20which,challenges%20associated%20with%20court%20litigations. accessed October 1, 2025

[18] Mekwunye v. Imoukhuede (2019) 13 NWLR (Pt 1690) 439 (SC)

[19] Gao Haiyan v. Keeneye Holdings (2011) HKCFI 2401 — Hong Kong Court of First Instance on Med-Arb neutrality

[20] Singapore International Arbitration Centre (SIAC) & Singapore International Mediation Centre (SIMC) Arb -MedArb Protocol 2014

[21] China International Economic and Trade Arbitration Commission (CIETAC) Arbitration Rules (2015), Article 47

[22] SIAC & SIMC Arb-Med-Arb Protocol, 2014

[23] Ali, Shahla F., The Legal Framework for Med-Arb Developments in China: Recent Cases, Institutional Rules and Opportunities (October 18, 2016). Dispute Resolution International, DRI 119. PP. 119 -132, 2016 , Available at SSRN: https://ssrn.com/abstract=3216252

[24] Gao Haiyan v. Keeneye Holdings (2011) HKCFI 2401

[25] United States v. City of Miami, 664 F.2d 435 (5th Cir. 1981)

[26] OGBOBE S S ‘The Roles Of Elders In Alternative Dispute Resolution: Nigeria In Context’ NOUN INTERNATIONAL JOURNAL OF PEACE STUDIES AND CONFLICT RESOLUTION [NIJPCR] VOL. 2, NO. 2, AUGUST, 2022

[27] Lagos Multi-Door Courthouse Annual Report 2021

[28] Petroleum Industry Act 2021

Ajiboye Nathaniel Adebayo is a 300 Level student of University of Ilorin. His email: ajiboyenathanieladebayo@gmail.com