Lateef Fagbemi, attorney-general of the federation (AGF), says the legal battle over the Mambilla hydropower project deepened Nigeria’s energy poverty.
In a statement on Tuesday, Fagbemi said the progress of the
Mambilla project was “held hostage” by the “relentless litigation and
arbitration” instituted by Sunrise Power and Transmission Company Limited
against Nigeria.
The AGF’s statement is a reaction to the verdict of the
International Chamber of Commerce (ICC) in Paris, France in the $2.35 billion
award sought by Sunrise Power over the Mambilla hydropower project.
On October 10, 2017, Sunrise started arbitration against
Nigeria at the ICC seeking a $2.354 billion award for “breach of contract” in
relation to a 2003 agreement to construct the 3,050MW plant in Mambilla, Taraba
state, on a “build, operate and transfer” basis valued at $6 billion.
The power contract was awarded to Sunrise by Olu Agunloye,
former minister of power, in May 2003 without approval from the federal
executive council (FEC) or the president.
On September 17, the ICC tribunal ruled in favour of Nigeria
in the $2.35 billion award and directed Sunrise and its promoter to reimburse
to Nigeria 75 percent of the legal fees and expenses incurred by the country in
the arbitration.
The tribunal dismissed Sunrise’s claim for a declaration
that Nigeria breached its contractual obligations under the settlement
agreement and the addendum.
The tribunal dismissed Sunrise’s claim for a declaration
that Nigeria breached its contractual obligations under the settlement
agreement and the addendum.
‘NIGERIA WON’T BE SOFT TARGET FOR PREDATORY LITIGATION AND
ARBITRATION’
In the statement, Fagbemi said the litigation deprived
Nigeria of the economic benefits of a 3,050-megawatt hydropower facility.
The AGF said the ICC verdict depicts a clear message that
Nigeria “will not be a soft target for predatory litigation and arbitration”.
Fagbemi said the tribunal had ruled that the settlement
agreement and the addendum of the contract are not binding on Nigeria since
“former Nigerian ministers who signed them lacked the requisite authority”.
“As a result, the project has been unable to achieve
financial close, depriving Nigeria and its people of the enormous economic
benefits of 3,050 megawatts of clean, renewable hydroelectric power,” the
statement reads
“The cost of this delay — measured in lost power generation,
foregone industrial output, and continued energy poverty — is incalculable
“This award serves as a clear and unequivocal message: the
Federal Republic of Nigeria will not be a soft target for predatory litigation
and arbitration.
“I would like to acknowledge the leadership efforts of
President Bola Ahmed Tinubu, GCFR who has consistently maintained the position
that under no guise should Nigeria succumb to fraudulently contrived
contractual agreements and any adverse claims arising therefrom.
“I also wish to express my immense appreciation to the
President for ensuring the provision of necessary financial and logistic
support for the effective defence of this matter.”
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