Leno Adesanya, promoter of Sunrise Power and Transmission Company Limited, told an International Chamber of Commerce (ICC) arbitration tribunal that he transferred $500,000 to Jennifer Douglas, then wife of former Vice-President Atiku Abubakar, in January 2003 as part of a foreign-exchange transaction conducted for Atiku.
The transfer was made on January 30, 2003, through China Castle Investments Limited, an offshore company controlled by Adesanya. It occurred about two weeks after Sunrise presented its tender for the Mambilla hydropower project and less than four months before the company was purportedly awarded the project.
The details were contained in the final award of a three-member ICC tribunal in the arbitration between Sunrise and the Federal Government.
The tribunal ultimately dismissed Sunrise’s claims against Nigeria and ordered the company and Adesanya to reimburse the Nigerian government for 75 per cent of its legal fees and expenses.
Nigeria had argued during the arbitration that the $500,000 payment to Douglas was connected to the disputed Mambilla contract. Sunrise and Adesanya denied this, insisting that it was a legitimate foreign-exchange transaction.
Adesanya said he operated a bureau de change business through Moneyline Ventures Limited and that the $500,000 sent to Douglas’s Citibank account in the United States represented dollars purchased for Atiku with naira.
“I confirm that I made a transfer of $500,000 to the Abubakars through my company China Castle Investments Ltd in early 2003,” Adesanya said in his fourth witness statement, according to the tribunal’s award.
However, the tribunal noted that Adesanya provided no documents showing the underlying naira payment, exchange rate, instructions from Atiku or his aides, correspondence relating to the transaction or evidence establishing its commercial purpose.
He said discussions concerning the transaction were oral and that he could no longer access any written records more than two decades later.
Neither Atiku nor Douglas testified before the tribunal, and neither provided a witness statement or declaration corroborating Adesanya’s explanation.
Adesanya initially suggested that Atiku’s lawyers had confirmed that the payment was a foreign-exchange transaction. Under cross-examination, however, he said the explanation had been communicated to him by “Dr Ndukwe”, whom he identified as Atiku’s medical doctor, while a subsequent confirmation allegedly came through lawyers.
When asked whether the information actually originated from Atiku, Adesanya described that as his “logical assumption”, saying he did not believe Atiku’s lawyers would have provided such information without consulting him.
The tribunal said Adesanya produced no correspondence, telephone records or other evidence confirming his alleged contacts with Atiku, his lawyers, Ndukwe or his aides.
Why Douglas Did Not Testify
Adesanya also explained why Douglas did not appear as a witness.
He said Douglas and Atiku had experienced a difficult divorce and that she had fallen out with him because he opposed the separation and supported Atiku and another wife.
“She would not even pick my call,” Adesanya said, according to the award.
The tribunal, however, observed an inconsistency between this account and Adesanya’s fourth witness statement, where he described himself as still being friends with Douglas and referred to her as a close friend and his first girlfriend in high school.
The tribunal also considered a 2010 report by the US Senate Permanent Subcommittee on Investigations concerning offshore transfers into Douglas’s US accounts. The report stated that when banks questioned the payments, Douglas maintained that the money came from her husband and said she had little knowledge of the offshore companies that transferred the funds.
The tribunal concluded that the lack of corroborating evidence and inconsistencies in Adesanya’s testimony prevented it from accepting his explanation that the $500,000 was a foreign-exchange transaction conducted for Atiku.
It also found that Adesanya failed to establish that Moneyline Ventures had a bureau de change licence at the relevant time. More importantly, the tribunal noted that the payment was made through China Castle, not Moneyline.
Adesanya acknowledged that China Castle was not licensed to conduct foreign-exchange transactions and that such activities were outside the company’s stated corporate purposes.
Mambilla Negotiations Had Started Earlier
The tribunal traced Sunrise’s involvement in the Mambilla project to 2001.
On September 12, 2001, Sunrise and North China Power Engineering Company met officials of the National Electric Power Authority (NEPA) to express interest in the project.
Sunrise was incorporated in Nigeria on October 9, 2001, with Adesanya, his wife and Lenoil Holdings Limited as its initial shareholders.
On October 18, Sunrise wrote to then-President Olusegun Obasanjo and Atiku, who was vice-president at the time, informing them of its interest in developing Mambilla with its Chinese partner.
Atiku subsequently met representatives of Sunrise and the Chinese company on November 13, 2001. According to minutes cited by the tribunal, he said the project was expected to cost about $6 billion.
In December 2001, Sunrise and its Chinese partner submitted a proposal to the technical committee of the federal ministry of power and steel.
Atiku later led a Nigerian delegation to China in July 2002, with Adesanya and then Minister of State for Power and Steel, Aliyu, among those on the delegation. Nigerian officials and Chinese companies subsequently signed a memorandum of understanding covering several power projects, including the first phase of Mambilla, then estimated at $4.5 billion with a proposed generation capacity of 2,600 megawatts.
By January 2003, Sunrise was in advanced negotiations with the federal government.
The company presented its tender to a multi-agency technical committee on January 15 or 16, 2003. About two weeks later, on January 30, China Castle transferred the $500,000 to Douglas’s Citibank account.
On March 12, 2003, the technical committee recommended Sunrise for the proposed 3,960MW project, citing its cost effectiveness, capacity to execute the project and economic implications.
The committee proposed further negotiations and noted that Sunrise had offered a tariff of 2.1 US cents per kilowatt-hour under a 40-year build-operate-transfer arrangement.
On April 7, then-Power Minister Olu Agunloye wrote to Obasanjo seeking approval to issue Sunrise a letter of comfort, commence negotiations on the concession and financing, determine how the government’s proposed 25 per cent equity would be funded and appoint technical consultants.
Obasanjo indicated that he had no objection but directed Agunloye to take the matter to the Federal Executive Council.
The proposal was considered at the council meeting of May 21, 2003. Obasanjo later maintained that the council did not approve the contract and that he ordered the memorandum withdrawn.
Sunrise, however, relied on a letter issued by Agunloye on May 22, 2003, as evidence that it had been awarded the Mambilla project on a build-operate-transfer basis.
That letter eventually became the basis of Sunrise’s multibillion-dollar arbitration claims against Nigeria.
Tribunal Examines Atiku’s Influence
Sunrise and Adesanya argued that Atiku lacked sufficient political influence to affect the purported award.
The tribunal disagreed with that contention, finding that Atiku had been directly involved in the Mambilla discussions from at least 2001 and had hosted meetings with Sunrise and its Chinese partners. He had also led the Nigerian delegation to China in 2002.
The tribunal referred to a February 2003 US diplomatic cable that described Adesanya as an “Atiku insider” and an associate of the vice-president.
Adesanya had told US officials that Atiku had extracted significant concessions from Obasanjo during negotiations over their re-election ticket and would become the “de facto head of government” if they won.
The tribunal concluded that Atiku possessed considerable political power and influence within the federal government during the first half of 2003.
However, the tribunal did not find that Atiku personally directed the $500,000 transfer. Atiku was not a party to the arbitration and did not testify.
Sunrise commenced its first arbitration against Nigeria in 2017, seeking about $2.35 billion over the alleged breach of the 2003 agreement.
The parties later negotiated a settlement under which Nigeria was to pay $200 million, but another dispute arose over the settlement. Sunrise subsequently sought an additional $200 million default payment.
In the latest arbitration, the ICC tribunal rejected Sunrise’s claims and declined to compel Nigeria to pay either the $200 million settlement sum or the additional $200 million default amount.
The tribunal also held that Adesanya was bound by the arbitration provisions of the settlement agreement and that it had jurisdiction over Nigeria’s counterclaim against him and Sunrise.
Nigeria’s recoverable legal costs were put at $11.82 million. The tribunal ordered Sunrise and Adesanya to reimburse 75 per cent of those costs, with about $2.5 million to be paid from funds held in ICC escrow and approximately $9.32 million payable by Sunrise and Adesanya, plus interest. /First reported by TC