The Central Bank of Nigeria (CBN) is proposing a major shift in how lending disputes are resolved, with plans to require creditors and borrowers to first submit to a mediation panel before approaching the courts.
This follows a circular issued by the apex bank on Tuesday, inviting stakeholders to review and comment on draft guidelines for a Mediation and Dispute Resolution Panel under the Secured Transactions in Movable Assets framework. The circular was signed by P. I. Oluikpe, Acting Director of the Development Finance Advisory Department.
Under the proposal, the panel would serve as the primary platform for resolving disputes arising from collateral-backed lending, signalling a move away from litigation-heavy processes toward alternative dispute resolution.
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According to the draft guidelines, the panel would exercise first-instance jurisdiction over civil disputes between creditors and borrowers in secured lending transactions. It would also have the authority to interpret relevant laws and regulations, including provisions of the Secured Transactions in Movable Assets Act, 2017, and the United Nations Commission on International Trade Law Model Law.
“The Panel shall, to the exclusion of any court of law or body in Nigeria, exercise first-instance jurisdiction to hear and determine any dispute arising from the operation and application of the Act,” the draft stated, adding that all parties must consent to its jurisdiction.
The CBN is effectively operationalising an existing provision of the Act by defining procedures, roles, and enforcement mechanisms for the panel. Once implemented, parties would be required to exhaust mediation before pursuing litigation.
The proposed framework introduces a structured and time-bound process, with decisions expected within 90 days of the first hearing. Awards issued by the panel would be legally binding and enforceable in court as consent judgments, with parties required to comply within 30 days or risk enforcement at the Federal High Court.
It also allows for interim and partial awards, while settlements reached during mediation can be adopted as final decisions. Appeals would be limited to points of law or mixed law and fact, subject first to High Court review before reaching the Court of Appeal.
The panel is designed to provide a specialised, cost-effective mechanism for disputes relating to movable asset-backed lending, including issues around the creation, perfection, and enforcement of security interests.
To qualify for adjudication, disputes must involve a valid security agreement, include a mediation clause recognising the panel, and show evidence that the security interest has been registered with the National Collateral Registry. Parties are also required to demonstrate prior good-faith efforts at resolution before approaching the panel.
Stakeholders have until October 9, 2026, to submit feedback on the draft guidelines as part of the CBN’s consultative policy process.
The proposal comes weeks after the CBN directed banks to restrict access to certain services for large borrowers with non-performing loans. In a March 12, 2026, circular signed by the Director of Banking Supervision, Olubukola Akinwunmi, the apex bank stated that such borrowers—flagged in the Credit Risk Management System or by licensed credit bureaus—would be barred from accessing additional credit facilities, as part of efforts to strengthen credit discipline and safeguard financial stability.
