MALAMI, FAGBEMI CLASH OVER $200M MAMBILLA SETTLEMENT

Former Attorney-General of the Federation, Abubakar Malami, and his successor, Lateef Fagbemi, have given contrasting accounts of the controversial $200m settlement between the Federal Government and Sunrise Power over the Mambilla Hydroelectric Power Project.

The disagreement followed a recent International Chamber of Commerce arbitration ruling in Paris, which rejected Sunrise Power and Transmission Company Limited’s claims against Nigeria and ordered the company and its promoter, Leno Adesanya, to reimburse Nigeria for legal and arbitration costs.

The dispute dates back to a 2003 agreement under which Sunrise was to develop a 3,050-megawatt hydroelectric power plant in Taraba State under a build-operate-transfer arrangement.

Sunrise later commenced arbitration against Nigeria in 2017, seeking billions of dollars in compensation over the project. The dispute eventually led to a January 2020 settlement under which Nigeria was to pay $200m, followed by a March 2020 addendum that provided for an additional $200m default payment, potentially increasing Nigeria’s exposure to $400m plus interest.

Reacting to the tribunal’s findings, Malami, through his Special Assistant on Media, Mohammed Bello Doka, rejected suggestions that he entered into any corrupt arrangement or acted in exchange for personal financial benefit.

Malami argued that the Mambilla dispute had existed for years before his tenure as AGF and had passed through several administrations, ministries and attorneys-general.

He said the government’s consideration at the time was whether a multibillion-dollar potential liability, prolonged litigation, financing challenges and delays to the project could be resolved through a smaller negotiated settlement.

The former AGF also stressed that the $200m settlement was never paid to Sunrise.

He said there was no evidence before the tribunal that he received money or any other financial benefit from Sunrise, Adesanya or any connected entity in connection with the proposed settlement.

Malami acknowledged that former President Muhammadu Buhari did not approve the payment, saying Buhari subsequently directed government lawyers to oppose Sunrise’s attempt to enforce the settlement and protect the Federal Government’s legal position.

He also cautioned against treating the arbitration tribunal’s findings as a criminal conviction, noting that the proceedings were commercial arbitration and that he was not a party to the case or given an opportunity to present his position before the tribunal.

Fagbemi, however, said the prolonged dispute and litigation had significantly delayed the Mambilla project and contributed to Nigeria’s continuing power challenges.

According to the current AGF, the project had been “held hostage” by the lengthy litigation and arbitration involving Sunrise.

Fagbemi said the tribunal found that the settlement agreement and its addendum were not binding on Nigeria because the government officials who signed them lacked the required authority.

He said the situation had prevented the project from reaching financial close and delayed the potential delivery of 3,050MW of hydroelectric power.

The AGF added that the delay had resulted in lost power generation and industrial output while contributing to the country’s energy challenges.

Fagbemi said the tribunal’s decision demonstrated that Nigeria would defend itself against claims it considers unfounded and would not be bound by contractual arrangements that lacked the necessary authority.

The ICC tribunal’s final award found the settlement agreements unenforceable, including on grounds relating to corruption and Nigerian public policy. It also rejected Sunrise’s claims and ordered the company and Adesanya to reimburse Nigeria for a portion of its legal costs.

The Nigerian government has described the ruling as removing a major legal obstacle surrounding the long-delayed Mambilla project. President Bola Tinubu also commended the Federal Ministry of Justice and Nigeria’s legal team for defending the country in the arbitration.

Malami said he would issue a more comprehensive response to the tribunal’s individual findings after reviewing the full award and the underlying records.