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Joint Operating Agreements (JOAs) govern the relationship between co-venturers in Nigeria's upstream oil and gas sector. They allocate rights, obligations, costs, and production entitlements among parties who jointly hold a licence or lease. Yet despite their commercial centrality, the legal status of JOAs in Nigeria remains surprisingly unsettled.

The Core Controversy

The primary controversy concerns whether a JOA, as a contract between licensees, can bind third parties — including the Nigerian National Petroleum Company Limited (NNPC) in joint venture arrangements — and whether its default provisions are enforceable in Nigerian courts in the same manner as in common law jurisdictions. Courts have at times treated JOAs as purely inter-partes instruments, limiting their reach significantly.

Recent Judicial Developments

Recent decisions by the Federal High Court have begun to grapple more substantively with JOA mechanics, particularly in the context of default, forfeiture of participating interests, and the enforceability of sole-risk clauses. The trend, though nascent, suggests a growing judicial appreciation for the commercial context in which these instruments operate.

Implications for Practitioners

Until there is clear appellate authority or legislative intervention, practitioners must draft JOAs with Nigerian-specific enforceability risk in mind — incorporating robust dispute resolution clauses, governing law provisions, and structuring security arrangements to minimise reliance on contested default remedies. At Pneuma and Law, we advise clients to treat each JOA as requiring bespoke Nigerian law analysis rather than transposing international precedents wholesale.

This article is for informational purposes only and does not constitute legal advice. For advice on your specific circumstances, please contact Pneuma and Law.

Nigeria's Public-Private Partnership framework — anchored in the Infrastructure Concession Regulatory Commission (Establishment) Act 2005 and various state-level PPP laws — offers significant opportunities for private investment in public infrastructure. However, the intersection of this framework with the Fiscal Responsibility Act 2007 (FRA) creates obligations that both government agencies and private partners must navigate carefully.

The Fiscal Responsibility Act's Reach

The FRA imposes a medium-term expenditure framework and requires that government borrowing and contingent liabilities remain within prescribed limits. PPP concession agreements that involve government guarantees, availability payments, or minimum revenue guarantees may constitute contingent fiscal liabilities, triggering disclosure and approval requirements under the Act.

Structuring for Compliance

Practitioners should structure PPP agreements to characterise government obligations in ways that are both commercially attractive and FRA-compliant — ensuring that revenue support mechanisms are subject to appropriation and that fiscal risk allocations are clearly documented. Pneuma and Law has extensive experience advising on PPP transactions that satisfy both investor expectations and statutory requirements.

This article is for informational purposes only and does not constitute legal advice.

When AMCON assumed management of Arik Air in February 2017, thousands of passengers held valid tickets for flights that would not operate, raising urgent questions about the enforceability of passenger rights under Nigerian law and the regulatory duties of the Nigerian Civil Aviation Authority (NCAA).

The Regulatory Framework

The Nigerian Civil Aviation Act 2022 and the Consumer Protection Regulations issued by the NCAA afford passengers certain minimum protections, including rights to refunds and compensation in cases of cancellation. However, insolvency creates a tension: these are unsecured claims ranking behind secured creditors and preferential debts in any administration.

Key Lessons for Airlines and Passengers

Airlines operating in Nigeria should maintain segregated passenger trust accounts to reduce insolvency risk to ticket holders. Passengers, for their part, should be aware of chargeback rights available through card issuers, which may offer a practical remedy outside the formal insolvency process. Pneuma and Law advises both carriers and passengers on rights and remedies in this space.

This article is for informational purposes only and does not constitute legal advice.

Nigeria's regulatory approach to cryptocurrency has oscillated between prohibition and cautious acceptance. The Central Bank of Nigeria's 2021 circular restricting banks from facilitating crypto transactions was partially reversed in 2023 with the introduction of the CBN's Virtual Asset Service Provider (VASP) framework, and the SEC's Digital Assets Rules have since provided a further layer of regulatory structure.

Current Compliance Obligations

Entities wishing to operate as VASPs in Nigeria must register with the SEC and comply with AML/CFT requirements under the Money Laundering (Prevention and Prohibition) Act 2022. This includes customer due diligence, transaction monitoring, and suspicious transaction reporting obligations materially equivalent to those applicable to traditional financial institutions.

Outlook

The regulatory trajectory suggests progressive formalisation of the crypto sector in Nigeria. Businesses should now treat regulatory compliance as a baseline rather than an afterthought. Pneuma and Law assists clients in structuring compliant crypto and FinTech businesses and navigating the evolving supervisory landscape.

This article is for informational purposes only and does not constitute legal advice.

Nigeria is party to a number of bilateral investment treaties (BITs) that include Most-Favoured-Nation (MFN) clauses. These provisions, which require a host state to extend to investors of one treaty partner the most favourable treatment it accords to investors of any third state, have been the subject of significant and divergent arbitral interpretation globally.

The Dispute Resolution Import Debate

The most contested question is whether MFN clauses permit investors to import more favourable dispute resolution provisions — such as broader arbitral jurisdiction or shorter waiting periods — from third-party BITs. Arbitral tribunals are divided, and Nigeria, like many states, has not taken a definitive public position on this question in its treaty practice.

Recommendations for Investors and the State

Foreign investors in Nigeria should audit the MFN provisions in applicable BITs before initiating arbitration, as they may unlock procedural advantages. Nigeria, for its part, should consider adopting model BIT language that expressly addresses the scope of MFN clauses to reduce arbitral uncertainty. Pneuma and Law advises both investors and government entities in international investment disputes.

This article is for informational purposes only and does not constitute legal advice.

Section 22 of the Land Use Act 1978 (LUA) provides that no holder of a statutory right of occupancy shall alienate, mortgage, transfer, or otherwise assign their right without the prior consent of the Governor. Transactions executed without consent are void — a consequence that Nigerian courts have consistently enforced, often to the consternation of sophisticated commercial parties who overlooked the requirement.

Common Traps in Practice

The consent requirement applies not only to outright sales but also to mortgages, sub-leases, and assignments of rights — a scope that catches many commercial parties unaware. Delays in obtaining consent also create significant risk in time-sensitive transactions, as parties may rely on agreements that are, at the time of execution, legally ineffective.

Drafting Solutions

Practitioners should include conditions precedent requiring Governor's Consent before any interest passes, with long-stop dates and clear allocation of the obligation and cost of obtaining consent. In secured lending, lenders should ensure that consent is obtained prior to drawdown rather than as a post-closing obligation. Pneuma and Law provides comprehensive property transaction advisory to ensure compliance with the LUA at every stage.

This article is for informational purposes only and does not constitute legal advice.