Mandatory ADR Before Litigation in Mining Disputes: Jurisdictional Gatekeeper or Obstacle to the Development of Nigerian Mining Law?
Mining law remains one of the least litigated and consequently least developed areas of Nigerian commercial jurisprudence. While this may, at first glance, suggest an industry characterised by certainty and regulatory efficiency, the reality appears to be quite the opposite. Many disputes arising from the administration of mineral titles never receive judicial consideration, not because they lack merit, but because the Nigerian Minerals and Mining Act 2007 and the Nigerian Minerals and Mining Regulations 2011 impose mandatory dispute resolution mechanisms that must first be exhausted before the jurisdiction of the Federal High Court can properly be invoked. The recent decision of the Court of Appeal in ASABA (NIG.) ENTERPRISES LTD v. MANGAL INDUSTRIES LTD & ORS (2023) LPELR-61008(CA) reinforces this position and provides another opportunity to reconsider whether the current statutory framework truly advances the development of Nigeria’s mining sector.
The appeal arose from proceedings commenced before the Federal High Court concerning mining interests regulated under the Nigerian Minerals and Mining Act 2007. Rather than addressing the substantive complaints of the parties, the central question before the Court of Appeal became whether the Federal High Court possessed jurisdiction where the claimant had approached the court without first complying with the mandatory mediation and arbitration procedures prescribed under the Act and the Regulations.
Jurisdiction has always occupied a special position within Nigerian procedural law. As repeatedly stated by the Supreme Court, jurisdiction is the lifeblood of every judicial proceeding. Once absent, every step subsequently taken by the court becomes a nullity regardless of how well conducted those proceedings may have been. It was therefore unsurprising that the Court of Appeal treated compliance with the statutory dispute resolution procedure not as a mere procedural irregularity capable of being waived, but as a condition precedent to the exercise of judicial power.
The statutory framework is relatively straightforward. Section 141 of the Nigerian Minerals and Mining Act 2007 provides that;
S.141( I) Any dispute arising between the holder of a mineral title and the
Government in respect of the interpretation and application of this Act, its regulations
and the terms and conditions of mineral titles shall be resolved, in the first instance,
on an amicable basis.
(2) Where the dispute is in the nature of a bona fide investment dispute, and
such dispute is not amicably settled as provided under subsection (I) of this section,
it shall be resolved in accordance with the provisions of the Nigerian Investment
Promotions Commission Act, Cap. N 117 Laws of the Federation of Nigeria, 2004.
(3) Any other dispute between the holder of a mineral title and the Government
shall be resolved in the Federal High Court, if not settled in accordance with the
provisions of subsection (1) or (2) of this section.
The Mining Regulations 2011 then elaborate upon this framework by prescribing mediation before a Committee to be established by the Minister and, where necessary, arbitration under the Nigeria Investment Promotion Commission Act before resort may be had to litigation. Regulation 15 empowers the Minister to establish a Committee for the purpose of resolving the disputes or categories of disputes listed, while Regulation 16 further provides the mechanism by which the mediation process is to be conducted, including the submission of written memoranda by the disputing parties and the opportunity for the Committee to facilitate settlement between them. Where mediation ultimately proves unsuccessful, Regulation 17 permits any party a right of appeal to the Minister, and where still unsatisfied with the decision of the Minister, shall then have a right to approach the Federal High Court to seek redress.
Read together, Section 141 of the Act and Regulations 15 to 17 establish what may fairly be described as a mandatory dispute resolution ladder. The statutory design is sequential rather than optional. Parties are expected to first attempt mediation, and only thereafter invoke the jurisdiction of the Federal High Court. It was precisely this legislative architecture that informed the Court of Appeal’s reasoning in ASABA (NIG.) ENTERPRISES LTD v. MANGAL INDUSTRIES LTD & ORS (2023) LPELR-61008(CA).
In reaching its decision in the case under consideration, the Court of Appeal relied substantially upon its earlier decision in Mining Cadastre Office v. UIG Petroleum & Transport Investment Ltd & Anor (2018) LPELR-46046(CA), where the court similarly held that failure to exhaust the statutory dispute resolution mechanism deprived the Federal High Court of jurisdiction. That earlier authority had already established that the dispute resolution provisions contained in the Act were not merely directory but constituted mandatory preconditions to litigation. The decision in ASABA (NIG.) ENTERPRISES LTD therefore represents not a departure from existing jurisprudence but rather a reaffirmation of an increasingly settled principle within Nigerian mining law.
The Court consequently held that where parties fail to first submit their dispute to the mediation and arbitration procedure established under the Act and Regulations, any proceedings commenced before the Federal High Court are incompetent and liable to be struck out for want of jurisdiction. In effect, compliance with the statutory dispute resolution framework is a jurisdictional threshold which every intending litigant must first cross before the doors of the Federal High Court become available.
As a matter of statutory interpretation, the decision is difficult to fault. Nigerian courts have consistently recognised the validity of contractual and statutory conditions precedent to litigation. The Supreme Court has repeatedly held that where legislation prescribes a particular procedure for the commencement of legal proceedings, that procedure must be strictly followed. The Court of Appeal merely applied this well-established principle within the context of mining legislations.
The more interesting discussion, however, lies not in whether the court correctly interpreted the statute, but whether the statutory framework itself continues to serve the long-term interests of Nigeria’s mining industry. One of the principal objectives of mandatory alternative dispute resolution is speed. Mining operations are highly capital intensive and disputes concerning licences, exploration rights and operational activities can significantly affect investment decisions. Encouraging parties to resolve disputes expeditiously through mediation or arbitration rather than prolonged litigation is therefore understandable from both commercial and regulatory perspectives. Confidentiality, technical expertise and procedural flexibility equally make ADR attractive within the extractive industries. Yet the practical experience of practitioners in the solid minerals sector tells a more complicated story.
The effectiveness of mandatory ADR as we can agree, necessarily depends upon the willingness and capacity of the regulatory institutions charged with administering those processes. Where those institutions respond promptly, mediation can indeed preserve commercial relationships and resolve disputes efficiently. Where they do not, the statutory requirement may cease to function as a dispute resolution mechanism and instead become an obstacle to justice. Ironically, the very statutory provisions intended to promote efficient dispute resolution may now be operating to produce the opposite result. Sections 141 and Regulations 15–17 assume an administrative process that functions promptly and efficiently. However, if requests for mediation are ignored or left unattended, the statutory ladder may become impossible to climb. Investors at that point are unable to proceed to court because the condition precedent remains technically unfulfilled, yet neither can they compel meaningful engagement with the mediation process. Access to justice therefore becomes dependent, not upon the merits or otherwise of the dispute, but on the responsiveness of the Cadastre Office, the Minister and his Committee who have all been charged with facilitating the very process that unlocks the court’s jurisdiction.
This concern is far from theoretical. In the course of representing clients within the mining sector, we have encountered situations in which formal requests for mediation and memoranda submitted pursuant to the Mining Regulations attracted no meaningful response from the relevant authorities. The inevitable consequence is that investors remain unable either to secure meaningful administrative review or to approach the Federal High Court because the statutory condition precedent remains technically unfulfilled. The regulatory silence in reality suspends access to justice indefinitely.
From a jurisprudential standpoint, another unintended consequence emerges. Because relatively few disputes survive the statutory gateway to judicial determination, Nigerian courts have had limited opportunities to develop coherent principles governing mining licences, mineral title revocations, competing applications, regulatory discretion, legitimate expectation, investor protections and administrative accountability within the mining sector. Consequently, many significant legal questions remain unsettled despite the increasing economic importance of solid minerals to Nigeria’s diversification agenda.
This raises an important policy question. Has the current legislative framework inadvertently prioritised procedural gatekeeping over the gradual development of Nigerian mining jurisprudence?
Strong judicial precedents perform functions extending far beyond dispute resolution. They promote regulatory certainty, guide administrative decision-making, improve investor confidence and create predictable standards upon which future commercial decisions may safely be based. In cases such as what is obtainable in Nigeria, where disputes rarely progress to judicial determination, those broader institutional benefits are diminished.
The concern assumes even greater significance when viewed through the lens of foreign investment. International investors frequently evaluate not merely the substantive protections available within a legal system but also the accessibility and predictability of its dispute resolution mechanisms. In instances where administrative decisions affecting mineral titles become difficult to challenge because mandatory preliminary procedures prove ineffective in practice, investor confidence may understandably be affected.
Recent developments appear to reflect this reality. The decision of Jupiter Lithium Limited (United Kingdom) to commence proceedings against the Federal Government of Nigeria before the International Centre for Settlement of Investment Disputes (ICSID), arising from the revocation of mining licences held through its Nigerian subsidiaries, illustrates the increasing willingness of foreign investors to rely upon investment treaty protections and international arbitration rather than domestic litigation whenever those avenues are available. While investment treaty arbitration serves an important function within international investment law, one cannot help but ask whether a more efficient domestic dispute resolution framework might reduce the perceived need to internationalise disputes that fundamentally concern the administration of Nigerian mining legislation.
None of this suggests that mediation or arbitration should be abandoned. Quite the contrary. ADR remains indispensable to modern commercial dispute resolution. The difficulty lies not in requiring parties to attempt settlement, but in allowing the effectiveness of access to court to depend entirely upon administrative processes over which litigants exercise little or no control. A statutory framework intended to promote efficiency should not inadvertently become capable of frustrating access to justice.
Perhaps the time has come for legislative reconsideration. One possible reform would be the introduction of clear statutory timelines within which mediation requests must be acknowledged and concluded, failing which parties should automatically become entitled to commence proceedings before the Federal High Court. Another would be to expressly preserve the jurisdiction of the court where regulatory inaction renders compliance with the statutory process impossible or futile. Such amendments would preserve the benefits of ADR while preventing procedural paralysis.
The decision in ASABA (NIG.) ENTERPRISES LTD v. MANGAL INDUSTRIES LTD & ORS (2023) LPELR-61008(CA) therefore does far more than reaffirm a procedural requirement. It exposes a broader conversation about the future direction of Nigeria’s mining regulatory framework. As the Federal Government continues to position solid minerals as a strategic pillar of economic diversification, equal attention must be devoted to ensuring that the legal framework governing disputes is not only efficient on paper but equally effective in practice. Ultimately, investor confidence is built not merely upon the existence of mineral resources, but upon confidence that disputes concerning those resources can be resolved promptly, fairly and predictably.