Over the past decade, Public Private Partnerships have increasingly been adopted by governments all over the World and the Nigerian Government is no exception. This is because the era of government singlehandedly providing infrastructural facilities is long gone, as they now cooperate with the private sector in the provision and management of various infrastructural facilities in their respective countries.[1]

Nigeria has also embraced the Public-Private Partnerships (PPP) initiative as a means of addressing the huge infrastructure deficits and challenges. However, PPP contracts are often long-term, and these projects tend to be complex in their scope, with multiple stakeholders leading to potential disputes arising.[2] In light of this, this article aims to discuss how disputes in Public-Private Partnerships and infrastructure projects in Nigeria can be managed effectively.

THE ROOT CAUSES OF DISPUTES IN PUBLIC-PRIVATE PARTNERSHIPS AND INFRASTRUCTURE PROJECTS IN NIGERIA.

Before going into how these disputes can be managed, it is important to first understand their root causes or systemic drivers. Most Disputes in Nigerian PPPs rarely arise from a simple technical failure. They are usually rooted in systemic governance issues and a failure to adequately address macroeconomic risks during the contracting phase.[3]

One of the most frequent causes of PPP and infrastructure project disputes is poor project preparation. Some of the contracts oftentimes lack the necessary flexibility to adapt to the downside risks of capital projects. This includes poor feasibility analysis, particularly in terms of forecasting demand for the infrastructure service, or information asymmetry between the public and private sectors.[4]

Another systemic driver is political interference and corruption. This typically leads to formal disputes over pricing and non-fulfilment of Public Private Partnerships (PPP) contracts on the part of the government or other major stakeholders.[5]

Difficulties in Resolving PPP Disputes

Most of the time, the private consortium and the government will have the largest stake in the PPP project. This is because PPPs are frequently long-term arrangements lasting over 30 years[6], the private consortium and government may be incentivized to overlook petty disputes that may arise. Taking a look from a macro perspective, the financial rewards of the PPP project as a whole far outweigh any short-term financial gain or loss that may arise from a minor dispute between parties. It is essential, however, that the private consortium not overlook the political risks involved in a PPP. The goals and support of one government’s administration may largely differ from those of a successor administration, thus increasing the likelihood of a dispute arising. On this basis, drafting and developing a carefully designed dispute-resolution process is critical from the commencement stage of the project[7].

Contrarily, downstream participants (e.g., sub-sub-contractors and laborers) are only interested in their interest in the project[8]. While the role of the downstream participants may be minor in comparison to the overall PPP project, these parties may nonetheless greatly affect a project’s success. Especially during a PPP’s construction phase, the ability for one contract participant to complete its task depends on another’s satisfactorily completing its task timeously and within the budget. Thus, one subcontractor’s failure to complete its portion may have significant ripple effects throughout the entire PPP project. It is therefore important that disputes stemming from downstream participants are not downplayed but are resolved quickly and efficiently, unless it may add more complexity to the dispute resolution process[9].

MANAGING DISPUTES IN PUBLIC-PRIVATE PARTNERSHIPS (PPP) AND INFRASTRUCTURE PROJECTS IN NIGERIA. 

When disputes arise in Public Private Partnerships, International best practice emphasizes the use of multi-tiered resolution clauses that require the parties first to seek an amicable solution internally, then move to structured Alternative Dispute Resolution (ADR), and finally to litigation if needed.

The Infrastructure Concession Regulatory Commission (ICRC), which regulates PPP procurement and ensures compliance with executed agreements, is strategically positioned to reinforce this preventative framework to oversee or serve as a centralized Dispute Avoidance and Adjudication Board.[10]

The following are some of the ways disputes in Public-Private Partnerships and infrastructure projects in Nigeria can be effectively managed.

1.      Negotiation and Expert Review. Many PPP contracts mandate that senior representatives meet to discuss any disagreement. The PPP Manual emphasizes that contracts should include agreed mechanisms for settling issues quickly. Some contracts also provide for a neutral dispute review board that issues recommendations or non-binding decisions on technical disputes. In practice, if a subcontractor payment or technical specification is contested, the Dispute Review Board can give an early opinion that often leads to a negotiated settlement and avoids disputes.[11]

2.     Mediation or Conciliation. If negotiation fails, the parties can proceed to mediation. Mediation is widely promoted for conflict resolution in Nigeria. For example, Lagos State’s Multi-Door Courthouse and various commercial centres encourage mediation as a first step.[12] The new Arbitration and Mediation Act 2023 further legitimizes mediation by including detailed provisions for both domestic and international mediations for the resolution of disputes.[13]

3.     Arbitration: Arbitration is the primary dispute resolution method when mediation is not successful or not pursued. PPP contracts in Nigeria almost always include an arbitration clause. Under the Arbitration and Mediation Act 2023, parties can choose domestic arbitration or opt for an international seat if one party is not based in Nigeria. Awards from arbitral tribunals are binding on the parties; if seated abroad, they are recognized under the New York or ICSID Conventions. Arbitration is generally faster and more flexible than litigation, which is why it is favoured as a means of settling disputes in complex Public Private Partnerships and infrastructure projects in Nigeria.[14]

4.     Litigation (Courts): Litigation can be time-consuming and expensive. The costs of litigation are compounded by its pre-trial process, time-consuming adjudication, several appeals, and complex enforcement procedure. Instituting an action in court should always be the last resort for the resolution of disputes. 

Courts can be used to enforce valid Public Private Partnership contracts, recognize arbitral awards, and may grant injunctions or declarations on procedural issues. To manage disputes that may arise, Nigerian courts must ensure continued support for the enforcement of arbitral awards and limit frivolous judicial interference, as the effectiveness of the AMA 2023 depends heavily on the judiciary’s commitment to reinforcing party autonomy and the finality of arbitration.[15]

CONCLUSION

In conclusion, a successful Public-Private Partnership dispute management in Nigeria would largely depend on careful risk allocation, vigilant contract oversight, and the use of multi-tiered dispute resolution. As the Nigerian Public Private Partnership practice evolves, it is important to have a well-structured agreement that will help ensure that even when conflicts arise, projects continue to deliver infrastructure rather than become stalled by litigation.

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[1] Ahatty, S., Ndekugri, I.E., Adaku, E., and Oladinrin, O. (2021). Dispute resolution in public-private partnership (PPP) infrastructure projects in Nigeria: literature review. International Journal of Engineering Research and Technology, 10(9), pp. 386-389.

[2] ibid

[3] World Bank Group Support to Public-Private Partnerships: Lessons from experience in client countries, fy02–1 https://ieg.worldbankgroup.org/sites/default/files/Data/reports/ppp_eval_updated2_0.pdf

[4] Soyeju, O. (2019). Legal framework for public-private partnership in Nigeria. De Jure Law Journal^.

[5] The Consequences of Political Interference in Bureaucratic Decision Making: Evidence from Nigeria – Open Knowledge Repository, accessed November 17, 2025, https://openknowledge.worldbank.org/entities/publication/dec9cfcd-d094-5573-8880-6ed677e338e1

[6] https://ppp.worldbank.org/ppp-contract-types-and-terminology#:~:text=Most%20PPP%20projects%20present%20a,term%20of%20the%20PPP%20contract. Accessed November 28, 2025

https://diazreus.com/resolving-disputes-in-privatepublic-partnership-agreements/ accessed November 17, 2025.

[8] https://dozr.com/blog/subcontractor-vs-general-contractor/accessed November 27, 2025.

[9] Ib.d

[10] FAQ – Infrastructure Concession Regulatory Commission (ICRC), accessed November 17, 2025, https://www.icrc.gov.ng/faq/

[11] DBs for PPPs – Dispute Resolution Board Foundation, accessed November 16, 2025, https://www.drbf.org/dbs-ppps

[12] Dispute resolution in the courts in Nigeria – DLA Piper REALWORLD, accessed November 17, 2025, https://www.dlapiperrealworld.com/law/index.html?t=construction&s=dispute-resolution&c=NG

[13] Dentons ACAS-Law – A new era for arbitration in Nigeria: Highlights of the Arbitration and Mediation Act, 2023 https://www.dentonsacaslaw.com/en/insights/articles/2023/june/16/a-new-era-for-arbitration-in-nigeria

[14] Public-Private Partnership Initiative in Nigeria and Its Dispute Resolution Mechanism: An Appraisal – UM Journal, accessed November 18, 2025, https://ejournal.um.edu.my/index.php/JMCL/article/download/14360/8793/28259

[15] Arbitration-related litigation in Nigeria: recent judicial developments and their cross-border implications | International Bar Association, accessed November 17, 2025, https://www.ibanet.org/arbitration-related-litigation-in-nigeria

Written by Olufe Popoola and Olatunji Bamidele for The Trusted Advisors

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