Nigeria set to lose another $2.3bn in France over alleged breach of contract

By Shola Abayomi.

Nigeria is on the brink of losing another $2.3bn in arbitration in France, following unresolved legal issues surrounding the Mambilla power project in Taraba State.

The Cable reports that the Federal Government reportedly awarded a contract to a local content partner, Sunrise Power and Transmission Company Limited (SPTCL) to build, operate and transfer (BOT) in 2003.

The SPTCL, however accused the government of signing another contract in 2017 with three Chinese companies, Sinohhydro Corporation of China, China Ghezouba Group Corporation of China and China Geo-Engineering Group Corporation, to form a joint venture for the execution of the project.

According to the chief executive officer of the firm, Leno Adesanya, the SPTCL was sidelined in the project by the ministry of power, despite series of petitions to President Muhammadu Buhari, Vice-President Yemi Osibanjo, Attorney-General of the Federation and Minister of Justice, Abubakar Malami, and former minister of power, Babatunde Fashola.

Adesanya added that the sudden breach of contract was orchestrated by ‘vested interests’ in the government, while accusing the chief of staff to the president, Abba Kyari, of singlehandedly withdrawing the company from the contract.

Consequent upon that, the SPTCL instituted legal action against the Federal Government and its Chinese partners at the International Chamber of Commerce (ICC) in Paris, France, for alleged breach of contract.

The company, therefore made the following claims for being short-changed out of the final contract:

1. Wasted expenditures: $100 million+

2. Loss of profit as content partner: $565 million

3. Loss of the commission due by SINOHYDRO to SUNRISE: $855 million

4. Loss of profit that would have been made through the resettlement contract: $525 million

5. Loss of reputation: $25 million+

Nigeria is currently faced with the risk of forfeiting its assets to satisfy a $9.6bn judgement debt imposed on the country by a UK court in favour of the Process and Industrial Developments (P&ID) as compensatory damages, following a failed Gas Supply Processing Agreement.

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