One of the key introductions of the Arbitration and Mediation Act, 2023 (AMA) is the provision for Third Party Funding (TPF) of arbitrations seated in Nigeria and arbitration-related proceedings in any court in Nigeria. This represents a significant development considering that previously, the common law principle against maintenance and champerty prevailed in Nigeria. Under the new regime, the twin torts of maintenance and champerty have been abolished. This ensures that the Third-Party Funder gets the protection of the law when enforcing in Nigeria, the Third-Party Funding Agreement (TPFA) or a foreign award arising from such agreement. It also paves the way for the Arbitral Tribunal, when fixing the costs of arbitration in its award, to consider the costs of obtaining third-party funding.

This article articulates the essential features of TPF under the AMA and highlights the key considerations for persons who desire to enter third-party funding arrangements.