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ARBITRATION vs. LITIGATION
July 2009 Vol. 22: Issue 7
Disputes are bound to arise in business
relationships and commercial
transactions. How commercial disputes
are resolved could affect an
organization’s profit, growth or
reputation.
Litigation by its very nature causes
anxiety to parties concerned. This is
primarily because of the uncertainties
on the outcome of litigation. In addition
to the general uncertainty on the
outcome are worries on the cost of
protracted litigation, the consequences
of a judgment against the party, the
reliability of witnesses, etc. However,
the suitability of arbitration over
litigation in specific cases depends
largely on the nature of the dispute, the
size and complexity of the claim and
most importantly the relationship
between the disputants.
Where parties have business or
personal relationships which they wish
to preserve, it is expedient for them to
settle their dispute by arbitration. This is
because the arbitration process is
relatively friendly. The parties can
resolve their dispute by arbitration and
continue their business relationship
unimpaired. Oftentimes, parties provide
for successive arbitration of disputes
©Blackfriars LLP 2010. All rights reserved. This document is for general guidance only. Definitive advice
should be sought from counsel if required. Blackfriars LLP, The Penthouse Floor, Itiku House, 28-30
Macarthy Street, Lagos. Tel: +234 1 739 0397; +234 1 736 9797; +234 1 736 9795; Fax: +1 646 536 8978.
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arising from a contract while the
performance of the contract continues.
This is unlikely in the case of litigation
in view of the confrontation and
uncompromising attitude of the parties.
The subject matter of the dispute
may be a sensitive one, such as an
invention which one or both parties
would not want to expose to the public.
It may even be a dispute in which if the
facts are disclosed to the public, the
effect may be detrimental to one or both
parties. In such a case it is prudent to go
to arbitration rather than litigation.
In cases where the resolution of a
dispute requires expert knowledge it is
advantageous to arbitrate because
parties will have opportunity of
appointing experts to sit over such
issues. This is unlike litigation where
case files are assigned to judges without
considering the technicality of the issues
in dispute.
In addition, as a general rule, the
decision of an arbitral tribunal, unlike
that of a court, is final and no appeal
lies. No doubt an award may be set
aside, but for a proper cause shown.
Basically, the grounds for recourse
against an award are limited.
For further information, please contact:
 WWW.BLACKFRIARS-LAW.COM

Ms. Lasbery C. Nwaeze

Email: Lasbery@blackfriars-law.com
Tel: + 234 1 739 0397
Fax: +1 646 536 8978

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©Blackfriars LLP 2010. All rights reserved. This document is for general guidance only. Definitive advice
should be sought from counsel if required. Blackfriars LLP, The Penthouse Floor, Itiku House, 28-30
Macarthy Street, Lagos. Tel: +234 1 739 0397; +234 1 736 9797; +234 1 736 9795; Fax: +1 646 536 8978.
http: www.blackfriars-law.com Email: info@blackfriars-law.com