My Customer Owes Me! Can I Arrest Them?
My Customer Owes Me! Can I Arrest Them? Let’s Talk Business Disputes In Nigeria
Introduction:
You have supplied goods, delivered services, maybe even on credit, because, well, “customer is king” right? But weeks have turned into months, and still no payment.
Now it’s been three months of silence. Your calls are ignored. Your messages left on read. You are angry, frustrated, and tempted to call the police to teach them a lesson.
Many business owners ask: Can I arrest my customer for owing me in Nigeria? The short answer is no, and here’s why.
In Nigeria, this is one of the most common business mistakes, treating a civil dispute like a criminal matter. Before you find yourself on the wrong side of the law or permanently damage a business relationship, let’s break down what the law says about debt, disputes and what to do when a customer refuses to pay.
What is a business dispute?
A business dispute arises when two parties, often businesses or individuals in a business relationship, disagree over the terms or performance of an agreement, whether written or verbal.
Common types of business disputes in Nigeria include:
1.Breach of Contract Disputes
This occurs when one party fails to meet their obligations under a legally binding agreement. Examples:
- A supplier fails to deliver agreed goods or services.
- A customer refuses to pay an invoice or underpays.
- An employee violates a non-compete clause.
2. Partnership Disputes
These happen between business partners over operations or finances. Common issues include:
- Disagreements over profit sharing.
- Conflicts about each partner’s role or responsibilities.
- Accusations of misconduct or mismanagement.
3. Employment Disputes
Disagreements between employers and employees or between employees themselves. Examples of employment disputes include:
- Discrimination or harassment claims by employees against employers or co-workers.
- Claims of wrongful termination by employees.
- Disputes over wages, benefits, or working conditions.
4. Intellectual Property Disputes
Intellectual property disputes arise when one party claims that another party has infringed on their intellectual property rights. Examples of intellectual property disputes include:
- Copyright infringement: Unauthorised use of creative works like books, music, or films.
- Trademark infringement: Using a brand name, logo, or slogan that belongs to someone else.
- Patent infringement: Making, using, or selling a patented invention without the patent holder’s consent.
How To Prevent Business Disputes
Prevention is often better, and cheaper, than resolution. Here’s how to reduce the risk:
1. Clear Communication
Effective communication is important to avoid disputes. Business owners should clearly communicate and be transparent about expectations, deliverables, payment terms, and timelines. This can help avoid misunderstandings and ensure that everyone is on the same page. Clear communication can also help prevent disputes from escalating by allowing parties to address issues early on.
2. Strong Contracts
Well-drafted contracts are essential, and can help prevent disputes by setting out clear expectations and obligations. Contracts should include:
- Scope of work
- timelines/Deadlines
- Payment terms
- Dispute resolution mechanisms
Business owners should consider having contracts reviewed by a business law firm/Lawyer to ensure that they are enforceable and cover all necessary provisions.
3. Regular Reviews
Periodically review contracts, policies, procedures, and relationships with customers, suppliers, and partners. Regular check-ins help you spot and fix problems before they spiral into full-blown disputes.
How Do You Handle Business Disputes Legally?
When a customer or client won’t pay, it feels personal, but using threats, violence, or the police is not the solution. In the eyes of the law, debt is a civil matter not a criminal one. That means the proper way to resolve it is through civil legal remedies not arrests.
Nigerian law gives you several legal options to recover your money without chaos, some of them are:
- Negotiation
Negotiation is often the first step in resolving a dispute. This involves the parties discussing their issues and attempting to reach a mutually acceptable solution. Negotiation can be an effective and efficient way to resolve disputes, particularly when the parties involved have a good working relationship.
- Mediation
Mediation is a form of Alternative Dispute Resolution (ADR) that involves a neutral third party helping the parties involved to reach a resolution. The mediator does not decide but instead facilitates discussions between the parties. Mediation can be an effective way to resolve disputes quickly and cost-effectively, particularly when the parties involved want to maintain their business relationship.
- Expert Determination
Expert determination is a form of dispute resolution that involves an expert in the relevant field making a binding decision on the dispute. This can be a useful option for resolving disputes that require specialised knowledge or expertise, such as disputes related to intellectual property or technical issues.
- Arbitration
Arbitration is another form of alternative dispute resolution that involves a neutral third party making a binding decision on the dispute. This decision is typically based on evidence presented by the parties involved. Arbitration can be a useful option for resolving disputes quickly and efficiently and can be particularly effective when dealing with complex disputes that require specialised knowledge.
- Litigation
Litigation is the process of resolving a dispute through the court system. While litigation can be time-consuming and expensive, it can be a necessary option when other forms of dispute resolution have been unsuccessful. Startups and SMEs should consider seeking the advice of a business law firm before pursuing litigation to ensure that they have a strong case and understand the potential risks and costs involved.
In the case of Oceanic Bank International (NIG) Ltd v. Oladepo (2012), the Court of Appeal strongly condemned using the police to recover debts or get involved in enforcements of contracts or settlement of disputes between parties.
Also, in the case of Abdulrahman Shugaba v. Cop & Ors, the court ruled that using the police to intimidate someone in a debt-related dispute is an abuse of power.
The police are not your debt recovery agents. Misusing them can land you in legal trouble, damage your business reputation, and even cost you legal problems. Instead, document everything, seek legal advice and use the right channels.
Final Word
Business comes with risks, but that doesn’t mean you should handle those risks with guesswork or aggression.
Know your rights. Use the right channels. Seek legal advice when needed.
Protect your hustle the right way!
References:
https://starrattorneys.co/protect-your-business-understanding-and-preventing-common-disputes-in-nigeria/
Want More?
Visit our Resource Page for more helpful legal guides. Follow us on social media to see how AWJAI is promoting justice, transparency, and accountability in Nigeria.
By the AWJAI Research Team