…FG celebrates
In an act of rare patriotism, the original awardee of the botched $5.8 billion Mambilla hydro-electric power project, Sunrise Power and Transmission Company Limited (SPTCL), has let Nigeria off the $500 million penalty hook incurred for multiple defaults on a $200 million settlement agreement.
Though Nigeria willingly entered into the out-of-court settlement in the course of arbitral proceedings at the International Court of Arbitration in Paris, France, it severally defaulted, resulting in over a half a billion-dollar penalty, which the country also signed up for.
The firm also was poised to claim close to a billion dollars in exemplary damages in its case against the country for unlawful termination of the contract, signed on May 22, 2003, and re-awarded to a Chinese firm, Messrs China Gezhouba Group Corporation/China Geo-Engineering Corporation, (CGGC/CGC).
It had launched a series of judicial counter to the termination of the contract on May 28, 2007, culminating in a 14-year delay, with the new awardee effectively barred from resuming the execution of the contract.
After a prolonged hiatus, President Muhammadu Buhari’s administration finally gave a firm commitment to the original agreement to settle out of court, for the new contractor to resume on-site for the project, estimated to generate 1,525MW at completion.
The Attorney-General of the Federation and Minister of Justice, Abubakar Malami, alluded to the fact that Nigeria could have lost about a billion dollars to the case.
In an interview on a television programme, he said there was cause for celebration on the Mambilla litigation resolution, because the move by Sunrise to discontinue arbitral proceedings in France had paved the way for the power project to come back to life.
President Buhari had directed the Nigeria Sovereign Investment Authority (NSIA) to “source” and pay $200 million to Sunrise.
It was learnt that the latest agreement to pay the firm the agreed sum at a go included a caveat for a new penalty if Nigeria should default again. The penalty this time is to be added to the $200 million and would be running until the liability is discharged.
In celebrating the new deal, which Dr. Kayode Ajulo, a fellow of the Chartered Institute of Arbitrators, United Kingdom, calls Nigeria’s best so far, Malami noted that “As it is, the only impediment to Mambilla project, which had been the pending litigation that stopped investors from investing in it, had been effectively displaced with the discontinuance of the arbitral proceedings by Sunrise.
Now that the coast is clear, stakeholders have urged the Federal Government to execute the project, adding that resources should be deployed for immediate implementation.
