Drafting for enforceability after the stamp duty repeal

Stamping changed completely

The Nigeria Tax Act 2025 repealed the Stamp Duties Act with effect from 1 January 2026 and re-enacted the regime in Chapter Five. Instruments executed on or after that date fall under the new provisions.

A dutiable instrument must now be stamped within 30 days of execution, down from 40 days under the old section 23(1), and the primary obligation rests on the beneficiary of the instrument — the transferee, the borrower, the party taking security — rather than being inferred from the penalty provisions. Late stamping attracts a 10% penalty on the unpaid duty plus interest at the Monetary Policy Rate for naira instruments. Under the old regime the penalty was a nominal sum and 10% per annum, which made non-compliance cheap. It is not cheap now.

Several substantive changes matter to drafting. Conveyance on sale is now confined to real property, so transfers of intangibles and other non-real business assets have dropped out of that head. Loan agreements running beyond twelve months attract ad valorem duty rather than a fixed fee. Duty is collected by the Nigeria Revenue Service and may be denoted digitally rather than by physical stamp.

The evidential point, which is the one that bites

The old Act made an unstamped instrument inadmissible, but section 22(1) supplied a cure: the court took notice of the omission and the instrument could be received on payment of the duty and penalty there and then. That machinery is why the leading authority, Okuwobi v Jimoh Ishola (1973) 3 SC 43, held that a document is not inadmissible merely for want of a stamp, the purpose of stamping being revenue protection rather than proof.

The Nigeria Tax Act’s admissibility provision renders an instrument that is not duly stamped inadmissible in court and in arbitration proceedings, with an exception for criminal proceedings. Independent commentary reports that the Act contains no equivalent of the old section 22(1) cure. If that is right, the indulgence in Okuwobi does not survive, because its reasoning was tied to the curative machinery that has gone.

We put this carefully because the section numbering in circulating versions of the Act is inconsistent and we have not been able to check the enacted wording against a Certified True Copy. But the prudent advice is the same whichever way the wording falls: stamp within 30 days and do not plan on curing it at trial. A contract you cannot put in evidence is not worth the paper.

Three tribunal decisions have sharpened the exposure. Share purchase agreements have been held to be dutiable instruments rather than exempt share transfers, with a substantial assessment upheld. Transfers of participating rights under production sharing contracts have been held to be conveyances on sale. And an agreement executed outside Nigeria has been held not liable absent evidence it was physically brought into the country — which makes the place of execution a drafting decision rather than an accident.

Electronic signatures, and the certificate people forget

Section 93(2) of the Evidence Act 2011 provides that where a rule of evidence requires a signature, an electronic or digital signature satisfies it. Section 17(1) of the Cybercrimes Act 2015 makes electronic signatures binding in commercial transactions and puts the burden on the party disputing the signature. The carve-outs in section 17(2) are narrow: wills and testamentary documents, death and birth certificates, family law matters, court documents, and a few others.

The trap is elsewhere. Section 93 validates the signature. Section 84 governs admissibility of the document, and a computer-generated statement is admissible only on proof of the section 84(2) conditions, evidenced by a certificate under section 84(4). Kubor v Dickson (2013) 4 NWLR (Pt 1345) 534 is the controlling authority and it is unforgiving. An e-signed contract can be perfectly valid and still be excluded because nobody prepared the certificate. The Evidence (Amendment) Act 2023 strengthened the section 84 route and added definitions for digital signature and electronic record; it did not touch section 93.

Arbitration clauses are materially stronger, if invoked in time

The Arbitration and Mediation Act 2023 repealed the 1988 Act. Section 5 now provides that a court shall stay proceedings and refer the parties to arbitration unless the agreement is void, inoperative or incapable of being performed — replacing a discretion with an obligation. But the application must be made not later than when submitting the first statement on the substance of the dispute. Plead to the merits first and the right is waived.

Other changes worth reflecting in drafting: the writing requirement is satisfied by electronic communication accessible for later reference; the default number of arbitrators is one, not three; tribunals may grant binding interim measures; an emergency arbitrator can be appointed within two business days; and the grounds for setting aside are exclusive, with the applicant required to show substantial injustice.

Name the seat expressly and separately from the venue. Nigerian courts have no jurisdiction to set aside an award from a foreign-seated arbitration — they may refuse enforcement, but they cannot annul. A clause that says only “arbitration in London” invites an argument about whether London is the seat or merely a hearing location, and the answer determines which courts can supervise.

Execution and registration

Getting the parties right defeats more contracts than getting the law wrong. Check that the signatory has actual authority, that the execution formalities in the Companies and Allied Matters Act are followed, and that a company’s constitution does not restrict the transaction. Where the contract creates a registrable charge, deliver the particulars within 90 days — a charge registered late is void against a liquidator and creditors, whatever the parties intended.

One recent decision is reassuring on a common anxiety: failure to register a technology transfer agreement with NOTAP renders it non-registrable rather than void, and a party cannot rely on its own registration failure to escape its obligations or to attack an arbitration clause.