Customary arbitration as a mechanism of dispute resolution is not alien in Nigeria’s legal system. The practice of resolution of conflicts via the application of the customs and traditions of the local communities has been entrenched from time immemorial. Some scholars have rightly argued that customary arbitration is the oldest machinery of dispute resolution in Nigeria. Dispute resolution via customary arbitration has tremendous edges amongst which are minimal cost, speed, and absence of technicalities, which are related to the conventional method of dispute resolution. In spite of these intrinsic advantages, the practice of customary arbitration in Nigeria is faced with some concrete challenges, which have continuously blighted its growth as a viable mechanism of dispute resolution in Nigeria. These challenges are majorly precipitated by the extant judicial parameters imposed on the application of customary arbitration. Among other considerations, this paper identifies some of these practical challenges in order to set the tone for the calibration of the abysmal practice of customary arbitration in the Nigerian judicial setting.