Arbitration is rarely used for the settlement of disputes other than commercial disputes in many countries, including Nigeria. Litigation has been the mechanism most commonly used for the settlement of family disputes but it has become very time consuming and has led to the need for a better mechanism for the settlement of such disputes. Many parties have resorted to mediation and negotiation but these have not been very effective due to a lack of final and binding decisions; hence the need for arbitration. The article highlights the relevance of applying arbitration to family disputes. Arbitration is rarely applied to family disputes in Nigeria even though it is increasingly being used in settling family disputes in developed countries, particularly in relation to child custody determination in the separation of couples, though not in the matter of the issue of the separation itself. This article recommends arbitration as a template for settling family disputes and the desirability of enacting a Family Arbitration Act in Nigeria. It concludes that there needs to be greater awareness of the value of arbitration as a template for family dispute settlement.