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ARTICLE · 23 OCTOBER 2026

Interpreting Multiple Dispute-resolution Clauses In Commercial Contracts

In modern commercial contracts, arbitration clauses are commonly included as the parties’ preferred dispute resolution mechanism, given its advantages of confidentiality, flexibility, efficiency, neutrality, and access to specialist adjudicators. However, the effectiveness of such clauses ultimately depends on their drafting precision. An arbitration clause intended to be mandatory may be construed as permissive if poorly drafted or paired with a jurisdiction clause, thereby allowing a party to bypass arbitration, contrary to the parties’ intention.

NigeriaLitigation, Mediation & Arbitration

Introduction

In modern commercial contracts, arbitration clauses are commonly included as the parties’ preferred dispute resolution mechanism, given its advantages of confidentiality, flexibility, efficiency, neutrality, and access to specialist adjudicators. However, the effectiveness of such clauses ultimately depends on their drafting precision. An arbitration clause intended to be mandatory may be construed as permissive if poorly drafted or paired with a jurisdiction clause, thereby allowing a party to bypass arbitration, contrary to the parties’ intention.

Significantly, on May 12, 2026, the High Court of Lagos State (Coram: Honourable Justice L. A. Okunnu) in Welltec Oilfield Services (Nig.) Ltd. v. Ace Loggers (Nig.) Ltd. & Anor., handed down an important decision highlighting the court’s approach in construing multiple dispute resolution clauses. Instructively, the court declined to stay its proceedings pending reference to arbitration on the ground that the dispute

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