The International Chamber of Commerce (ICC) Arbitral Tribunal in Paris has rejected a $400 million claim brought against the Federal Republic of Nigeria by Sunrise Power and Transmission Company Limited and its principal, Mr Leno Adesanya. The dispute relates to the 3,050-megawatt Mambilla Hydroelectric Power Project. The tribunal ruled that the Settlement Agreement and its Addendum were not binding on the Federal Government of Nigeria.
The tribunal found that the former Nigerian ministers who signed the agreements lacked the requisite authority to commit the government without presidential approval. The agreement was also tainted by corruption and violated Nigerian public policy, making it unenforceable. The Attorney-General of the Federation (AGF) and Minister of Justice, Prince Lateef Fagbemi, described the ruling as a comprehensive victory for Nigeria.
The AGF stated that the tribunal found Adesanya had engaged in a prolonged pattern of bribery and corruption involving substantial payments to several senior Nigerian government officials connected with the Mambilla Project. A corrupt agreement had been reached between Adesanya and former senior government officials who signed the Settlement Agreement. The tribunal described the pattern as an established “modus operandi” involving financial incentives to influential government officials.
As a consequence of the ruling, Sunrise and Adesanya were ordered to bear 75 per cent of Nigeria’s legal fees and expenses, with interest at 10 per cent per annum compounded annually. The tribunal expressed hope that the costs order would deter Adesanya and his companies from pursuing further frivolous legal proceedings against Nigeria.
The dispute had contributed to prolonged delays in the development of the Mambilla Project, with financing from the China Export-Import Bank conditioned on the resolution of the disputes. The project has been unable to reach financial close, depriving Nigeria of the potential economic and energy benefits of 3,050 megawatts of hydroelectric power.
The AGF credited President Bola Ahmed Tinubu with maintaining the position that Nigeria should not be bound by what the government considers fraudulently contrived contractual agreements. The President provided the financial and logistical support required for the defence of the case. The AGF reaffirmed the commitment of his Ministry to defending Nigeria’s legal interests and providing legal representation to the Federal Government.
The Mambilla Hydroelectric Power Project has been the subject of legal disputes and arbitration proceedings involving Sunrise and the Nigerian government for more than two decades. The AGF described the award as a message that Nigeria would not be a “soft target” for predatory litigation and arbitration.
Key points
- The ICC tribunal rejected the $400 million claim due to lack of authority and corruption.
- The tribunal ordered Sunrise and Adesanya to bear 75 per cent of Nigeria’s legal fees and expenses.
- The ruling is a victory for Nigeria, affirming its stance against fraudulently contrived contractual agreements.
