By Lemmy Ughegbe, Ph.D
Nigeria has every reason to celebrate its victory in Paris. It has just escaped a multibillion-dollar liability arising from a dispute that has haunted successive administrations for more than two decades. But even as the country applauds those who successfully defended its interests abroad, there are difficult questions waiting to be answered at home.
On September 17, an International Chamber of Commerce arbitration tribunal in Paris handed Nigeria a significant victory in its long running dispute with Sunrise Power and Transmission Company Limited over the Mambilla Hydroelectric Power Project. The tribunal rejected claims which exposed Nigeria to more than $3.38 billion. At a time when the country is grappling with debt, infrastructure deficits and enormous pressure on public finances, escaping a potential liability running into trillions of naira is no small achievement.
Credit must therefore go where it is due. The Attorney General of the Federation and Minister of Justice, Prince Lateef Olasunkanmi Fagbemi (SAN), the Federal Ministry of Justice and Nigeria’s external defence team deserve commendation for successfully defending the country’s interests. The external team, led by Elizabeth Oger Gross and Tolu Obamuroh of Paul Hastings LLP, navigated a complex international arbitration whose consequences for Nigeria could have been enormous.
President Bola Tinubu was right to acknowledge their work, alongside the contributions of former President Olusegun Obasanjo and the late former President Muhammadu Buhari, who testified, former ministers Babatunde Fashola (SAN), and Suleiman Adamu, other witnesses and experts, the National Security Adviser and the Economic and Financial Crimes Commission.
For Fagbemi in particular, the victory underscores the importance of an Attorney General seeing himself first as the lawyer of the Federation and custodian of the public interest. Nigeria has had painful experiences with international commercial disputes. Preventing another multibillion-dollar liability from crystallising is therefore an achievement deserving recognition.
But victory in Paris cannot extinguish the questions at home. Indeed, it makes answering them even more important.
The dispute stretches back more than two decades to a purported 2003 agreement involving Sunrise and the Federal Government for the development of the Mambilla project. Successive administrations became entangled in the controversy until Sunrise commenced arbitration against Nigeria in 2017, claiming billions of dollars for alleged breach of the agreement.
Then came another extraordinary development. In 2020, Nigeria entered into a settlement agreement under which Sunrise was to receive $200 million, with subsequent provisions increasing Nigeria’s potential exposure. The latest tribunal rejected claims arising from that settlement, but the award has thrown up troubling questions about how public officials conduct business on behalf of more than 200 million Nigerians.
Reports quoting the final award say the tribunal made serious findings concerning the conduct of former Attorney General of the Federation and Minister of Justice, Abubakar Malami, SAN, in his handling of the settlement with Sunrise. It reportedly concluded that the settlement and its addendum lacked the required presidential approval and were unenforceable.
These are findings of an arbitral tribunal and must be presented as such. They are not a licence for trial by newspaper, nor can they substitute for criminal proceedings where allegations must be proved according to law. But they demand answers. How does an agreement capable of exposing an entire country to hundreds of millions, and ultimately billions, of dollars travel through government without the safeguards expected of transactions of such magnitude?
More troubling is that Nigeria has been here before. The Process and Industrial Developments case should still be fresh in our memories. Nigeria came frighteningly close to losing more than $11 billion before an English court set aside the arbitral award after finding that it had been procured by fraud. Mambilla therefore suggests that our problem is bigger than P&ID, Sunrise or any particular administration. It is institutional.
The pattern is disturbingly familiar. An agreement is signed or purportedly entered into. Another administration questions it. Arbitration follows, foreign lawyers are retained and billions of dollars belonging to Nigerians are suddenly at risk. If Nigeria eventually wins, government celebrates and everybody moves on. The question rarely pursued with sufficient determination is who should answer for getting Nigeria into the mess.
Even victory is expensive. The tribunal ordered Sunrise and Adesanya to reimburse Nigeria for substantial legal fees and expenses and allocated most of the arbitration costs to them. That recovery underlines the effectiveness of Nigeria’s defence, but years of litigation have still consumed public resources, time and institutional energy.
And therein lies perhaps the cruellest irony of Mambilla. The project was supposed to generate electricity. Instead, for years, it generated litigation. A country suffering chronic electricity shortages found itself debating contracts, settlements, addenda, arbitration clauses and multibillion dollar claim over a power project whose electricity Nigerians are still waiting to enjoy.
The cost therefore cannot be measured solely in lawyers’ fees. There is the opportunity cost of electricity not generated, industries not powered, jobs not created and communities denied the transformative possibilities of reliable energy.
Another aspect of the award has inevitably entered Nigeria’s political conversation. Reports refer to a $500,000 payment made in 2003 by a company controlled by Sunrise promoter Leno Adesanya to Jennifer Douglas, then wife of Vice President Atiku Abubakar. Adesanya reportedly explained that it was part of a foreign exchange transaction undertaken for Atiku, while the tribunal reportedly found the explanation unsupported by documentary or witness evidence. Atiku has responded that the tribunal did not find him guilty of corruption or wrongdoing.
That distinction matters. An arbitral tribunal examining evidence in a commercial dispute is not a criminal court determining an individual’s guilt. The controversy should therefore not be reduced to partisan ammunition when the more consequential institutional questions cut across successive governments.
The bigger issue transcends Atiku, Malami, Adesanya, Sunrise or Tinubu. It is about how Nigeria protects itself. Major government agreements capable of creating enormous contingent liabilities must undergo rigorous legal, financial and technical scrutiny, with unmistakable authority, documented approvals and identifiable responsibility.
Sunrise says its lawyers are reviewing the award and considering lawful options, so continued caution is necessary. But Nigeria need not wait for another arbitration to learn the obvious lesson. Government should establish how the Mambilla agreements and settlements were negotiated, who authorised what and whether established procedures were followed. Where evidence establishes wrongdoing, those responsible should answer according to law.
Nigeria cannot continue to socialise the risks created by questionable official decisions while privatising responsibility for making them. The Fagbemi-led legal effort deserves applause for helping the country avert a potentially ruinous liability. But the greater victory will be building institutions strong enough to prevent such exposures from arising in the first place.
Nigeria won in Paris. Prince Lateef Fagbemi (SAN), and the legal team deserve their flowers for that victory. But after the applause comes accountability, because while Paris has delivered its answer, the questions at home remain.
Lemmy Ughegbe, Ph.D, FIMC, CMC
Email: lemmyughegbeofficial@gmail.com
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