Nigeria - Market Insights

Introduction

In every legal system, the true test of justice lies not merely in the pronouncement of judgment, but in the ease of enforcement. A judgment creditor is entitled to expect the full benefits of a decision delivered in their favour and nothing less.

In Nigeria, transforming a judicial victory into financial recovery can be extremely challenging. Judgment debtors increasingly deploy strategic measures, such as dilatory appeals which may last for decades, to frustrate enforcement efforts, and turn a favourable judgment into a prolonged enforcement struggle.

Given that the enforcement of arbitral awards is tied to the Nigerian court system (with its delays), what was designed to be a swift and efficient resolution of a commercial dispute can easily become protracted and lose touch with its purpose.

It is against this backdrop that this chapter examines some novel trends in overcoming the hurdles to the enforcement of monetary court judgments and arbitral awards in Nigeria.

The enforcement framework for monetary judgments in Nigeria

The principal statute governing the enforcement of court judgments in Nigeria is the Sheriffs and Civil Process Act (SCPA), Cap. S6, Laws of the Federation of Nigeria 2004. The SCPA provides mechanisms for realising monetary obligations, such as garnishee proceedings, writ of attachment, charging order, writ of sequestration, or an order of committal.

Although these enforcement mechanisms are designed to ensure that a successful litigant is not denied the fruits of a judgment, in practice, however, their effectiveness is undermined by procedural limitations and strategic resistance from judgment debtors.

For instance, the court in Nigerian Breweries Plc v. Chief Worhi Dumuje [2016] 8 NWLR (Part 1515) 536, 555 held that the enforcement of judgments through any of the above-stated mechanisms can be arrested by the judgment debtor’s filing of an appeal, along with an application for stay of execution. These appeal proceedings are often dilatory, and leverage on the generous appellate rights as provided in sections 233(2) and 241(1) of Constitution of the Federal Republic of Nigeria 1999 which permits appeals against final judgments (including in a suit to enforce an arbitral award) up to the Supreme Court, without providing a robust regime for interest and/or costs to compensate for wasted time.

Furthermore, where no appeal has been filed, a nimble judgment debtor can out-manoeuvre the slow garnishee system which may take two to three weeks for listing and hearing, by quickly removing funds from target banks after the judgment is announced but before the garnishee order nisi to freeze funds is issued.

Enforcement of arbitral awards under the Arbitration and Mediation Act 2023

The enforcement of arbitral awards in Nigeria is governed by the Arbitration and Mediation Act (AMA) 2023. Section 57 of the AMA provides that an arbitral award shall be enforced upon application to the court. In effect, while an arbitral award is binding, it is incapable of execution until it is voluntarily complied with, or enforcement is granted by the court.

Whilst the losing party may resist enforcement by applying to set aside the award, it may only do so on grounds of procedural irregularities, and the court may not review the award on its merits. These safeguards align with international best practices and due process. However, susceptibility to court litigation that may stretch for years prolongs recovery timelines and undermines arbitration’s efficiency.

Enforcement trends

Under Nigerian law, a monetary judgment takes effect from the date pronounced, unless the court specifies a payment timeline. This position was affirmed in the case of Olatunji v. Owena Bank Plc & Anor [2008] LPELR-2578 (SC). Furthermore, the law is settled that the mere filing of an appeal to challenge a monetary judgment would not stop the enforcement of the judgment, unless an application for stay of execution is filed to preserve the status quo and arrest the enforcement process.

A common issue arises when judgment debtors file appeals, secure stays, and then neglect to prosecute the appeals speedily. By the time appeals conclude, inflation or currency devaluation may have eroded the judgment sum’s value.

The solution evolved by the courts when faced with an application for stay of execution, in the context of an appeal filed against a monetary judgment, is to require the judgment debtor to deposit the judgment sum into an interest-yielding account opened in the name of the registrar of the court, as a condition precedent for a grant of an application for stay of execution or injunction pending appeal. This is what was done in the case of Globe Motors Holdings Nig. Ltd v. Akinyemi Adegoke Oyewole [2022] LPELR-56856(CA). This preserves the sum’s commercial value while balancing parties’ rights.

However, some judgment debtors circumvent this requirement by expediting the preparation and transmission of the records of the appeal to the appellate courts and filing another stay of execution application there. This deprives the judgment-delivering court of jurisdiction to rule on the initial stay of execution application and also prevents it from imposing the condition of depositing the judgment sum into an interest-yielding account. Appellate courts have very congested dockets and often avoid hearing applications for stay-of-execution. The appellate courts prefer to deal with substantive appeals and, rather than hear arguments on applications for stay of proceedings, they would invariably exhort counsel to file their respective briefs of argument and apply for an accelerated hearing of the appeal. This tactic allows judgment debtors to retain funds for years.

A recent innovative approach that we have applied in the context of the enforcement of an arbitral award which arose from a disputed lease, was by way of an ex parte application for the interim appointment of a receiver to collect the rents and manage the subject property, pending the determination of an application to enforce the award. In this case, a lessee of a property consisting of 15 flats was in repudiatory breach of the lease, as it failed to pay rent to the lessor whilst it continued to let the property to subtenants and collect the rents (for over two years). The lessee’s excuse for failing to pay rent was that the elevator in the property was faulty and that the lessor was thereby in breach of its obligations to keep the property structurally sound.

The dispute was referred to arbitration, and the tribunal found in favour of the lessor. The tribunal also upheld the lessor’s claim for forfeiture of the lease and immediate repossession of the property. Given that the arbitral award was not voluntarily complied with, and in anticipation of the award debtor’s dilatory tactics, we applied to court for an order to enforce the award, together with an application for interim ex parte orders to appoint a receiver to collect the rents and manage the subject property, pending the determination of the enforcement proceedings. As anticipated, the lessee also applied to set aside the arbitral award and requested that the parties should maintain the status quo. The lessee was aiming to use court processes and the appeals process to hold on to the property for several more years, without paying rent, to the detriment of the lessor.

In a ruling delivered on 3 December 2025 by Honourable Justice L. A. Okunnu in Suit No: LD/10108GCM/2025 (King of Bosses Limited v. Green Birch Tech Limited), the High Court of Lagos State granted our application and appointed a receiver to collect rents and manage the subject property, pending the hearing of the enforcement proceedings. The court directed that the receiver (not the lessor) would be accountable to the court, and should pay over all rents to a bank account that was to be opened in the name of the registrar of the court and render periodic statements of accounts.

The option of appointing a receiver ex parte to protect the res pending the determination of enforcement proceedings is advantageous for award creditors and may be used where the facts support it. First, it ensures asset preservation where there is credible evidence of the risk of dissipation or deployment of dilatory tactics by the judgment debtor. This is particularly useful in cases involving rental income, ongoing business operations, or revenue-generating assets. Second, it protects the interests of the party that is ultimately entitled to the judgment sum, as the receiver safeguards the proprietary and economic interests of the judgment or award creditor by assuming neutral control over the debtor’s assets. Third, it ensures professional management of assets pending final resolution, as the receiver’s fiduciary duty ensures transparency, accountability, and structured asset administration.

Conclusion

Judgment debtors are customarily reluctant to settle judgment debts and will explore different strategies to delay or evade their obligations. Accordingly, judgment creditors must be creative, devising approaches to protect and realise judgment value while minimising abuse and delay.