Nigeria has won a long-running arbitration dispute with Sunrise Power and Transmission Company Limited over the proposed Mambilla Hydroelectric Power Project in Taraba State.
An International Chamber of Commerce (ICC) arbitration tribunal sitting in Paris, France, dismissed Sunrise’s claims against the Federal Government, including its demand for more than $2.35 billion in damages.
The three-member tribunal also rejected the company’s claim that Nigeria had breached its obligations under a settlement agreement and an accompanying addendum.
It further dismissed Sunrise’s demand for $400 million, comprising a $200 million settlement sum and another $200 million claimed as a default payment.
The tribunal ruled that Leno Adesanya, the promoter of Sunrise, 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.
Sunrise to reimburse Nigeria’s legal costs
The tribunal ordered Sunrise and Adesanya to reimburse Nigeria 75 per cent of the legal fees and expenses incurred during the arbitration.
The legal costs were assessed at $11,819,506.51, with $2.5 million to be recovered directly from funds held in escrow by the ICC.
The remaining $9,319,506.51 is to be paid by Sunrise and Adesanya, with interest accruing at 10 per cent annually, compounded annually, from the date the final award is notified until the amount is fully paid.
The arbitration costs were fixed at $1,656,500. Sunrise and Adesanya are to bear 75 per cent of the amount, while Nigeria will pay the remaining 25 per cent.
The tribunal was chaired by Melaine van Leeuwen, with Stavros Brekoulakis and Simon Nesbitt serving as co-arbitrators.
Nigeria was represented by a legal team led by Elizabeth Oger-Gross and Tolu Obamuroh of Paul Hastings LLP.
Tinubu welcomes ruling
President Bola Tinubu welcomed the tribunal’s decision, describing it as a major development in the long-running dispute over the Mambilla project.
Tinubu said the ruling had cleared what he described as the “single biggest legal hurdle” that had stalled the hydropower project for years.
The President commended the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, and officials of the Federal Ministry of Justice for their efforts in the case.
He also praised Nigeria’s defence team and acknowledged the contributions of former President Olusegun Obasanjo and the late President Muhammadu Buhari, who testified during the proceedings.
Other witnesses commended by the President included former ministers Babatunde Fashola and Suleiman Adamu, as well as experts who participated in the defence of Nigeria’s position.
Tinubu also acknowledged the support of the National Security Adviser and the Economic and Financial Crimes Commission in relation to the case.
He said the government remained committed to working with genuine investors and honouring its legal obligations, while defending the country against claims it considers unfounded.
Dispute dates back to 2003 contract
The dispute arose from a 2003 agreement for the construction of a 3,050-megawatt hydropower plant in Mambilla, Taraba State, under a build-operate-transfer arrangement valued at about $6 billion.
Sunrise commenced arbitration proceedings against Nigeria at the ICC in October 2017, seeking approximately $2.354 billion over an alleged breach of contract.
The dispute later included a 2020 settlement agreement between the parties. Sunrise subsequently sought $400 million, alleging that Nigeria had failed to honour the terms of the settlement.
Former President Obasanjo previously denied authorising the original contract. In a 2023 interview, he said the then Minister of Power, Olu Agunloye, lacked the authority to commit the Federal Government to a project of that value without presidential approval.
Obasanjo said he had not authorised the contract and recalled directing Agunloye to withdraw a memorandum on the project from the Federal Executive Council.
The late President Buhari also denied authorising the 2020 settlement agreement. In correspondence to the Attorney-General, Buhari said he had declined to approve the proposed settlement when it was presented to him in April 2020, maintaining that he saw no basis for Sunrise’s claim.
The latest tribunal decision has rejected Sunrise’s principal claims and ordered the company and its promoter to bear a substantial portion of Nigeria’s legal and arbitration costs.
