Nigeria has secured a major victory in the long-running legal dispute with Sunrise Power and Transmission Company Limited over the Mambilla hydropower project, after an International Chamber of Commerce (ICC) tribunal in Paris dismissed the company’s $2.35 billion claim against the country.
The three-member tribunal also ordered Sunrise Power and its promoter, Leno Adesanya, to reimburse Nigeria 75 per cent of the legal fees and expenses incurred during the arbitration.
The award, issued on Thursday, rejected Sunrise’s claim that Nigeria breached its contractual obligations under a settlement agreement and an addendum relating to the Mambilla project.
The tribunal also dismissed Sunrise’s request for an order compelling Nigeria to pay $400 million, comprising a $200 million settlement sum and another $200 million in default payments.
In addition, the tribunal ruled that Adesanya was bound by the arbitration agreement with Nigeria under the settlement agreement and addendum. It also affirmed its jurisdiction over Nigeria’s counterclaim against Adesanya and his firm.
Nigeria’s legal expenses in the arbitration were fixed at $11.82 million. Of this amount, $2.5 million will be taken from funds held in escrow by the ICC and released upon notification of the final award.
Sunrise and Adesanya were ordered to pay the remaining $9.32 million to Nigeria, together with interest at an annual rate of 10 per cent, compounded annually, from the date of notification of the final award until the amount is fully paid.
The tribunal fixed the arbitration costs at $1.66 million, with Sunrise and Adesanya responsible for 75 per cent and Nigeria for the remaining 25 per cent.
The panel was chaired by Melaine van Leeuwen, with Stavros Brekoulakis and Simon Nesbitt serving as co-arbitrators.
How the dispute started
The dispute dates back to a 2003 agreement involving the proposed construction of the 3,050-megawatt Mambilla hydropower plant in Taraba State.
The project, estimated at about $6 billion, was initially structured as a build, operate and transfer arrangement.
Sunrise commenced arbitration against Nigeria at the ICC International Court of Arbitration on October 10, 2017, seeking approximately $2.354 billion over an alleged breach of contract.
The company later pursued a second arbitration over a 2020 settlement agreement, seeking $400 million after alleging that Nigeria failed to honour the terms of the settlement.
The legality and authority behind both the original contract and the subsequent settlement have been subjects of controversy.
Former President Olusegun Obasanjo, who was president when the 2003 agreement was signed, said in 2023 that he never authorised the contract.
Obasanjo said no minister at the time had the authority to commit the federal government to a $6 billion project without presidential approval, adding that he had not given such approval.
He also said he had previously instructed former Minister of Power Olu Agunloye to abandon the proposal and questioned how Agunloye subsequently proceeded with the agreement.
Former President Muhammadu Buhari similarly denied authorising the 2020 settlement agreement.
In a letter to Attorney-General and Minister of Justice Lateef Fagbemi, Buhari said that although his ministers had engaged Sunrise and other stakeholders in efforts to resolve the dispute, he had never specifically authorised them to conclude a settlement with the company.
Buhari said the proposed settlement and addendum were presented to him for consideration in April 2020, but that he declined to approve them because he believed there was no basis for Sunrise’s claim.
The latest arbitration ruling therefore brings another major development in Nigeria’s efforts to defend itself against the financial claims arising from the disputed Mambilla project.