Nigeria has secured victory in an international arbitration case against European Dynamics UK Ltd, saving the country from potential liability of US$6.2 million over a national electronic government procurement (eGP) project, officials said Sunday.
The dispute arose from a contract involving the design, development, installation, and maintenance of a national e-procurement system managed by the Bureau of Public Procurement (BPP) and supported by the World Bank. The project aimed to improve transparency and efficiency in federal procurement processes.
European Dynamics UK Ltd filed claims totalling approximately $6.2 million, including $2.4 million for alleged milestone completions, US$3 million in general damages, and $800,000 in settlement claims.
The arbitral proceedings took place before the International Centre for Arbitration and Mediation in Abuja, with Funmi Roberts serving as the sole administrator of the tribunal.
According to the Attorney-General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi, the tribunal dismissed all claims filed by the company, ruling that Nigeria was not liable for any payments beyond verified performance outcomes.
Central to the dispute was a User Acceptance Test (UAT) conducted by the BPP, which reportedly identified significant functional deficiencies in the software, including omissions and performance errors. The tribunal upheld Nigeria’s position that the contractor was responsible for correcting these deficiencies without additional payment.
The arbitrator also rejected claims that the vendor could merge multi-phase project modules into a single phase for payment purposes, noting that the contract clearly structured payments according to distinct project milestones.
“Nothing in the contract suggests that such a merger is permissible, particularly given that payment is structured in phases. Consequently, the contractual framework was distorted,” the tribunal concluded.
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Nigeria’s legal team, led by Basil Udotai of Johnson & Wilner LLP, focused on strict technical compliance and contractual obligations tied to performance standards. Officials said the ruling demonstrates the growing competence of Nigerian legal expertise in international arbitration.
Adebowale Adedokun, Director-General of the BPP, described the outcome as a significant milestone for Nigeria’s public procurement system. “We stood our ground because payments must correspond to demonstrable value delivered,” he said, noting that the contractor had previously won arbitration cases against several African countries.
The AGF welcomed the ruling, saying it sends a clear signal that Nigeria will vigorously defend public resources in international contractual disputes. “This win demonstrates that Nigeria can no longer be taken for granted,” Fagbemi said.
The victory follows the country’s efforts to strengthen contract management and dispute resolution in the wake of the high-profile Process and Industrial Developments (P&ID) arbitration case. In that case, Nigeria faced an $11 billion award over a failed gas processing agreement, which was eventually set aside by a UK court in 2023 due to fraud and corruption.
Officials said the latest ruling reinforces the importance of rigorous testing standards, clearly defined milestones, and stronger oversight mechanisms in government technology projects. Lessons from the case are expected to inform ongoing reforms in Nigeria’s e-procurement framework, reducing the risk of similar disputes in the future.
The tribunal ruling is final and not subject to appeal, effectively shielding Nigeria from potential financial exposure estimated at over US$6.2 million (approximately 9.3 billion naira).
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Nigeria has increasingly relied on international arbitration to resolve high-value disputes involving public contracts. The latest case involves European Dynamics UK Ltd, a technology contractor that managed a national electronic government procurement (eGP) project under the Bureau of Public Procurement (BPP). The eGP system, supported by the World Bank, was designed to enhance transparency and efficiency in federal procurement processes.
The dispute centred on payments linked to project milestones. European Dynamics claimed $6.2 million in payments and damages, arguing that partial deliveries justified payment. Nigeria maintained that payments were strictly tied to verified performance outcomes and that the contractor had failed key User Acceptance Tests (UAT), revealing software deficiencies and functional errors.
The case was heard by the International Centre for Arbitration and Mediation in Abuja, with the tribunal dismissing all claims by the company. The ruling affirmed Nigeria’s stance that software delivery must meet contractual and operational standards before payments are made, and that phases of the project could not be merged for financial gain.
This arbitration follows lessons from the high-profile Process and Industrial Developments (P&ID) case, in which Nigeria faced an $11 billion award over a failed gas processing agreement, later set aside by a UK court in 2023. Authorities say the P&ID case prompted stricter contract oversight, early technical evaluation, and stronger legal strategies in managing public projects.
Officials see the victory against European Dynamics as a demonstration of Nigeria’s improved capacity to protect public finances, enforce performance-based contracts, and strengthen the integrity of government procurement systems. The ruling is final and not subject to appeal, shielding the country from potential liability of over US$6.2 million (around N9.3 billion).
