Another Attempt to Fleece Nigeria of Billions of Dollars Collapses in Paris

…ICC throws out Sunrise Power’s $2.35bn Mambilla suit, hits plaintiffs with $11.8m costs

By Jeremy Fregene
Another attempt to extract billions of dollars from Nigeria through an international arbitration claim has collapsed after a tribunal of the International Chamber of Commerce in Paris rejected the $2.35 billion sought by Sunrise Power and Transmission Company Limited over the long-running Mambilla Hydropower Project dispute.

The ruling represents a major financial reprieve for Nigeria and comes against the backdrop of the country’s increasingly aggressive defence against multibillion-dollar arbitration claims arising from disputed government contracts.

In its final award issued on Thursday, the three-member tribunal dismissed Sunrise’s claim that Nigeria breached contractual obligations under agreements relating to the proposed Mambilla power project.

The tribunal also rejected the company’s demand that Nigeria pay $400 million under a subsequent settlement arrangement — comprising a $200 million settlement sum and another $200 million claimed as a default payment.

Instead of Nigeria paying Sunrise, the tribunal ordered the company and its promoter, Leno Adesanya, to reimburse the country $11,819,506.51 for legal fees and expenses incurred in fighting the case.

Of that amount, $2.5 million is to be recovered directly from money held in escrow by the ICC, while Sunrise and Adesanya were ordered to pay the outstanding $9,319,506.51, plus interest at 10 per cent annually, compounded from the date of notification of the award until full payment.

The tribunal further held that Adesanya was bound by the arbitration agreement and ruled that it had jurisdiction over Nigeria’s counterclaim against him and Sunrise.

Arbitration costs were fixed at $1,656,500, with Sunrise and Adesanya bearing 75 per cent and Nigeria 25 per cent.

The panel was chaired by Melaine van Leeuwen, with Stavros Brekoulakis and Simon Nesbitt as co-arbitrators. Nigeria’s legal team was led by Elizabeth Oger-Gross and Tolu Obamuroh.

At the heart of the dispute is the Mambilla Hydropower Project in Taraba State, one of Nigeria’s longest-running infrastructure controversies.

Sunrise commenced arbitration against Nigeria in October 2017, demanding $2.354 billion for alleged breach of a purported 2003 agreement under which it was to construct the then 3,050MW Mambilla plant on a build-operate-transfer basis. The project was valued at about $6 billion.

A second dispute subsequently arose from a 2020 settlement agreement intended to resolve the original arbitration, with Sunrise seeking $400 million after alleging that the Federal Government failed to honour the settlement.

But the contractual foundations of the claims were disputed by successive Nigerian administrations.

Former President Olusegun Obasanjo maintained that he never authorised his then Minister of Power, Olu Agunloye, to commit Nigeria to the $6 billion project.

Obasanjo said the approval limits in force during his administration made it impossible for a minister to independently commit the government to a project of that magnitude. He also said he had directed that the proposal be stepped down when it came before the Federal Executive Council in May 2003.

Former President Muhammadu Buhari similarly denied approving the 2020 settlement agreement.

Buhari said that although his ministers had engaged Sunrise in an effort to resolve the dispute, he rejected the proposed settlement when it was presented to him on 20 April 2020, because he believed there was no basis for the company’s claim.

The Sunrise defeat recalls Nigeria’s landmark victory over Process & Industrial Developments Limited in London in 2023, when a British court overturned an arbitration award that had exposed the country to a potential liability of about $11 billion.

Thursday’s ruling marks another successful defence of Nigeria’s public finances against a multibillion-dollar arbitration demand arising from a disputed contract — with the claimants this time ordered to reimburse millions of dollars spent by the country defending itself.