An arbitration clause is often the shortest paragraph in a fashion contract, and the one nobody reads carefully until a dispute actually happens. By then, it is too late to fix. A poorly drafted clause does not simply create friction, it can be found unenforceable entirely, leaving a designer, brand, or manufacturer back in exactly the slow, public, multi-jurisdictional litigation ADR was meant to avoid in the first place.
For fashion lawyers drafting manufacturing agreements, licensing deals, influencer contracts, and collaboration agreements across African jurisdictions, understanding precisely what a genuinely enforceable arbitration clause requires, and what quietly undermines one, is essential technical knowledge, not boilerplate to copy from a previous contract without thought.
Why This Matters More in Fashion Than in Most Other Industries
Fashion contracts routinely involve parties across multiple countries, a Nigerian designer, a South African manufacturer, an Italian fabric supplier, an American influencer, each operating under a different legal system, often with genuinely competing expectations about how a dispute should be resolved. A vague or defective arbitration clause in this context does not just create inconvenience, it can leave a party with no clear, enforceable path to resolution at all, precisely when speed matters most given fashion’s short commercial lifecycle.
What a Genuinely Enforceable Arbitration Clause Must Contain
The seat of arbitration. This is the legal “home” of the arbitration, determining which country’s arbitration law governs the proceeding’s procedural framework, and which courts have supervisory jurisdiction over it. This is a purely legal designation, distinct from where hearings physically take place, and it must be stated explicitly. A clause that simply says “arbitration in Lagos” without clarifying whether this refers to the seat or merely a convenient hearing venue creates real ambiguity a tribunal or court will have to resolve later, at cost and delay to the parties.
The governing law. The substantive law that will govern the contract itself, Nigerian law, English law, or another jurisdiction entirely, must be specified separately from the seat of arbitration. These two are genuinely distinct concepts that inexperienced drafters frequently conflate, the seat governs procedure, the governing law governs the actual rights and obligations in dispute.
The language of proceedings. For contracts involving parties from Francophone, Anglophone, or Lusophone African markets, or international partners entirely, specifying the language of arbitration proceedings upfront avoids a genuinely costly, time-consuming dispute about translation and procedure before the actual substantive dispute can even be addressed.
The administering institution and applicable rules. A clause should name the specific arbitral institution, if any, administering the proceeding, and the procedural rules that will apply. In Nigeria, this now sits against the backdrop of the Arbitration and Mediation Act 2023, which replaced the outdated Arbitration and Conciliation Act 1988 and substantially modernised the country’s arbitration framework, introducing statutory emergency arbitrators, third-party funding recognition, and a default rule of a single arbitrator unless the parties specify otherwise, a change that meaningfully lowers the cost of domestic arbitration compared to the old three-arbitrator default. A clause silent on institution and rules leaves the parties to negotiate this from scratch after a dispute has already arisen, exactly the wrong moment to be negotiating process rather than substance.
Arbitrator qualifications. For fashion-specific disputes, particularly those involving licensing, IP, or complex supply chain issues, specifying that any appointed arbitrator have relevant fashion, IP, or commercial expertise is a genuine, practical advantage. Left unspecified, parties may end up with an arbitrator with no meaningful understanding of how licensing royalties, seasonal production timelines, or image rights actually function commercially.
Scope of disputes covered. A clause should clearly state which disputes fall within the arbitration agreement, all disputes arising from the contract, or only certain categories. A narrowly drafted scope can inadvertently exclude precisely the type of dispute that later arises, forcing a party back into litigation for a claim the clause never anticipated.
The Drafting Mistakes That Quietly Fail
The “midnight clause” problem. Arbitration clauses are notoriously the last provision negotiated, often inserted quickly at the end of a drafting process with minimal attention, earning the informal nickname “midnight clause” among practitioners. This haste is precisely why so many clauses end up internally inconsistent, naming one seat but referencing another institution’s rules, or specifying a governing law that conflicts with the seat’s own mandatory procedural requirements.
Ambiguous or pathological clauses. A clause that names a non-existent institution, references outdated or repealed rules, or contains internally contradictory terms, arbitration in one city under another city’s rules, for instance, risks being challenged as a “pathological clause,” one so defective a court may find it unenforceable altogether, or at minimum, spend significant time and cost resolving the ambiguity before arbitration can even begin.
Failing to update references after legislative change. A clause drafted years ago that still references Nigeria’s repealed Arbitration and Conciliation Act 1988, rather than the current Arbitration and Mediation Act 2023, is not automatically fatal, since the AMA generally applies going forward regardless of the contract’s own wording, but it signals outdated drafting practice that should prompt a broader review of the agreement, and in cross-border contracts where the governing law is genuinely unsettled, such outdated references can create real interpretive uncertainty.
Silence on interim relief. Fashion disputes frequently require urgent action, stopping a counterfeit sale, freezing a shipment, before a full arbitral tribunal can even be constituted. A clause silent on interim measures leaves a party without clear recourse in exactly the moment speed matters most. The Arbitration and Mediation Act 2023’s introduction of statutory emergency arbitrator provisions is directly relevant here, but a clause should explicitly confirm the parties’ agreement to this mechanism rather than leaving it to be inferred.
Failing to address multi-party or multi-contract scenarios. Fashion collaborations frequently involve several related contracts, a licensing agreement, a manufacturing agreement, and a distribution agreement, between overlapping parties. Arbitration clauses drafted in isolation, without considering consolidation or joinder across these related agreements, can leave a brand facing multiple separate, inconsistent arbitration proceedings over what is functionally a single commercial dispute.
No default mechanism for appointing an arbitrator. Where parties cannot agree on a sole arbitrator, a clause should specify a clear fallback, a named institution empowered to make the appointment, rather than leaving the parties deadlocked and forced back to court simply to get the arbitration itself started.
A Practical Drafting Checklist
Before finalising any fashion contract’s arbitration clause, confirm the following are each addressed explicitly and consistently: the seat of arbitration, stated as a legal designation, not merely a hearing location; the governing law of the underlying contract, stated separately from the seat; the language of proceedings; the administering institution and the specific, current rules that apply; any required arbitrator qualifications or expertise; the precise scope of disputes covered; a default mechanism for arbitrator appointment if the parties cannot agree; and explicit confirmation of the parties’ agreement to interim or emergency relief mechanisms where urgency may arise.
The Bottom Line
An arbitration clause is not boilerplate. It is the provision that determines whether, when a fashion dispute inevitably arises, a brand actually gets the fast, confidential, expert-led resolution ADR promises, or finds itself back in exactly the slow, public, multi-jurisdictional litigation the clause was meant to avoid. Given how routinely fashion contracts span multiple African and international jurisdictions, and given Nigeria’s own arbitration framework has genuinely modernised under the Arbitration and Mediation Act 2023, there is no excuse for treating this clause as an afterthought. The clause negotiated last is too often the one that matters most.
Learn more about Fashion Law Institute Africa’s work on dispute resolution, contract drafting, and AFODRC at thefashionlawinstitute.org.
