The Central Bank of Nigeria (CBN) has proposed a new set of guidelines to restructure how lending disputes are resolved.
In the proposed guideline, the CBN is proposing that creditors and borrowers must first submit to a mediation panel before approaching the courts.
This follows a circular signed by P. I. Oluikpe, Acting Director, Development Finance Advisory Department, inviting stakeholders to comment on draft guidelines for the Mediation and Dispute Resolution Panel under the Secured Transactions in Movable Assets framework.
The proposed framework positions the panel as the first point of call for resolving disputes arising from collateral-backed lending, marking a shift from litigation-heavy processes to alternative dispute resolution mechanisms.
Under the draft guidelines, the Mediation and Dispute Resolution Panel is designed to serve as the primary platform for handling civil disputes between creditors and borrowers in secured lending transactions.
The draft guidelines read, “The Panel shall, to the exclusion of any court of law or body in Nigeria, exercise first instant jurisdiction to hear and determine any dispute arising from the operation and application of the Act.
“In the exercise of its jurisdiction, the Panel shall have the power to interpret any law, rule or regulation as may be applicable to secured transactions in movable assets under the Act, and the United Nations Commission on International Trade Law (UNCITRAL) Model Law.
“All parties to a dispute before the Panel shall consent and submit to its jurisdiction.”
The framework draws its authority from the Secured Transactions in Movable Assets Act, 2017, which already recognises the panel as the first recourse for dispute resolution.
The CBN is now operationalising this provision by outlining procedures, roles and enforcement mechanisms.
Notably, the panel is granted first instance jurisdiction over such disputes, effectively requiring parties to exhaust mediation before pursuing litigation.
Both creditors and borrowers are expected to consent to the panel’s authority as part of their lending agreements.
The draft guidelines introduce a structured and time-bound dispute resolution process, with the panel expected to deliver decisions within 90 days of the first hearing.
To ensure enforceability, awards issued by the panel will be legally binding and can be enforced in court as consent judgments.
Parties are required to comply with decisions within 30 days, failing which the awards may be registered at the Federal High Court for enforcement.
