Abuja, Nigeria – The Central Bank of Nigeria (CBN) has proposed a new framework that would require lenders and borrowers to resolve disagreements through a mediation panel before resorting to lawsuits.
The move is intended to streamline how lending disputes are handled by prioritizing alternative dispute resolution over litigation. The CBN has released draft guidelines for public comment on the new process.
The proposed Mediation and Dispute Resolution Panel would serve as the mandatory first stop for any civil disputes arising from loans secured by movable assets. According to Okay News, this gives the panel “first instance jurisdiction,” meaning parties involved in a loan dispute must go through this mediation process before they are permitted to file a case in court. This requirement would be a standard part of new lending agreements.
Under the draft guidelines, the panel’s decisions would be legally binding and time-bound, with a target of resolving cases within 90 days of the first hearing. Awards issued by the panel must be complied with within 30 days and can be registered at the Federal High Court for enforcement, giving them the same weight as a court judgment. This structured approach aims to provide a faster and more cost-effective resolution process.
The initiative is designed to build confidence in the credit system and accelerate access to credit by ensuring that disputes are handled efficiently. It aligns with the Secured Transactions in Movable Assets Act of 2017, which already provided a legal basis for such a panel. By operationalizing it, the CBN is taking a significant step to strengthen credit discipline and protect the stability of the financial system.
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