WAICO and Nigeria: A New AI Governance Bloc, and the Disputes Ahead
By Augusta Shahin, MCIArb(UK), and Joseph Mtemdoo Gbagyo, ACIArb (UK), CISM
On 16 July 2026, twenty-nine countries signed an agreement in Shanghai to establish the World Artificial Intelligence Cooperation Organization, or WAICO. The body is headquartered in Shanghai, structured as an independent intergovernmental organization, and built on United Nations Charter principles. Ten African states are among the founding members. Nigeria is not one of them.
No official reason has been given, by Nigeria or by WAICO, for the country’s absence, and we will not invent one. What we can say is that the membership door is open. WAICO admits any sovereign state and applies no political test for entry, so this is a decision Nigeria can still make, in either direction, at a later date.
That is worth sitting with, because the founding roster tells its own story. No major Western economy signed. The United States, the United Kingdom, the European Union, Japan and South Korea are all absent. The members skew heavily toward the Global South and toward states already close to Beijing on trade and technology. Analysts have read WAICO plainly, as a China-led counterweight to the AI governance frameworks led by the United States and Europe. For the first time, there is a second pole forming in AI governance, defined by open membership and a development-first agenda.
For Nigeria, the debate is already live. At least one national commentary has argued that Nigeria, as Africa’s largest economy, should join, warning that countries absent from these discussions risk becoming rule takers rather than rule makers. That is a legitimate position. So is the opposite one, that a non-aligned state gains flexibility by staying out of a bloc that reads as tied to one great power. The politics are not ours to settle.
What is ours is what follows for businesses and for dispute practice, and here the picture is clearer than the politics.
The problem is divergence, whichever way Nigeria goes
Start with what WAICO is designed to become. A standards-setting venue with a permanent secretariat. Bodies like this rarely enforce anything at first. Commentators have already noted that WAICO is unlikely to govern the AI industry in a binding way. But standards do not need to be binding to matter. Over time, standards become procurement requirements. If WAICO members adopt shared technical benchmarks, data-sovereignty rules or model-provenance expectations for public and private contracting, those expectations reach anyone selling into those markets.
Now hold two facts together. There is a China-aligned governance track forming. There is an existing Western track built around the EU AI Act and the G7 process. If those two tracks diverge, and there is every reason to expect they will, businesses operating across both inherit the friction. A Nigerian company, or a foreign company operating in Nigeria, may find itself contracting with a counterparty on one track while its regulator, its data, or its infrastructure sits closer to the other.
That is where disputes are born. Not in the agreement itself, which is days old and largely aspirational, but in the contracts written under it over the next few years.
The dispute questions to anticipate now
Three areas deserve attention before, not after, a problem arises.
First, cross-border AI contracts. Where two parties sit under divergent standards regimes, the contract has to do the work the instruments do not. Governing law, seat of arbitration, and the standard against which performance is measured all become live negotiating points rather than boilerplate. A clause that ignores the split will not survive contact with it.
Second, data sovereignty. Nigeria already has the Nigeria Data Protection Act 2023. If a China-led bloc produces data-localization and data-transfer expectations that pull in a different direction from Western frameworks, cross-border data flows become a compliance and dispute exposure at the same time. Parties will disagree about which regime governs, and those disagreements will need a neutral forum.
Third, the enforcement gap. WAICO has no published dispute mechanism. A standards body without a resolution process pushes disputes back onto the parties and onto existing arbitral institutions. That is not a weakness from where we sit. It is the reason well-drafted arbitration agreements matter more, not less, in a fragmenting order.
Why we read this the way we do
Our reading is not abstract. Joseph, one of the authors of this piece, recently completed a training programme at Shanghai Customs University covering China’s trade facilitation framework, its Authorized Economic Operator systems, smart customs, and cross-border e-commerce. That work gave us a direct, current view of how China designs and operates cross-border regulatory systems, and how those systems treat standards, data and compliance.
We raise it for one reason. Institutional design is not neutral. The way a system defines standards and handles the movement of data across borders shapes where disputes form and how they are resolved. Having looked closely at how China builds these systems, we do not read WAICO as a symbolic gesture. We read it as the early scaffolding of a governance track that will, in time, produce concrete obligations, and therefore concrete disputes.
What businesses should do
You do not need to know whether Nigeria will join WAICO to act. You need to assume that the AI governance landscape your contracts operate in is going to split, and to draft for that now.
Practically, that means dispute resolution clauses in AI, data and technology contracts should be treated as substance, not form. A staged structure of negotiation, then mediation, then binding arbitration, with a carefully chosen seat and governing law, gives parties a clear path when standards diverge. Data provisions should anticipate conflicting regimes rather than assume a single one. And forum selection should be made with the two-track world in mind, not the single-track assumptions that no longer hold.
The agreement is new. The disputes it will produce are not yet visible. That is exactly why now is the time to prepare for them.
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NexusADR LLP
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