• As Fagbemi says P&ID case would have crippled nation’s economy Alex Enumah in Abuja The federal government has called on the United Nations (UN) to evolve reforms that will
• As Fagbemi says P&ID case would have crippled nation’s economy
Alex Enumah in Abuja
The federal government has called on the United Nations (UN) to evolve reforms that will protect national sovereignty in arbitration disputes between investors and member-states.
The federal government also sought reforms that would reinforce, rather than by-pass, domestic courts in Investors-States Disputes Settlement (ISDS).
Attorney-General of the Federation (AGF) and Minister of Justice, Prince Lateef Fagbemi (SAN), made the appeal on Thursday during the heads of delegations roundtable at the Chief Legal Advisors Forum (CLAF) 2026 in Singapore.
According to Fagbemi, the reforms sought in the ISDS would address the inadequacies and imbalances in legal framework, and protect investments and country’s taxpayers.
In a statement issued to journalists, Fagbemi, while commending the forum convened by Ministry of Law of Singapore, said as global investment flows evolved and states confronted new development challenges, the need for a modern, balanced, and credible dispute settlement system had never been more urgent.
The statement signed by the minister’s media aide, Kamarudeen Ogundele, recalled how the AGF, upon assuming office, took steps to address the challenges by constituting a committee of experts to review Nigeria’s bilateral treaties and Nigeria’s commitment under multilateral treaties and conventions in order to promote and protect investments in Nigeria.
He disclosed that Nigeria became a strong proponent for clarity concerning calculation of damages because of the experience in the Process and Industrial Developments Ltd. (P&ID) case, which would have crippled the country’s economy.
Fagbemi said, “States consistently express concern about the opacity of arbitral proceedings and the unpredictability of awards. Nigeria continues to support reforms that enhance transparency of proceedings, consistency in arbitral reasoning, and predictability in outcomes. These elements are essential for investor confidence and state trust alike. That is why Nigeria is a strong proponent for clarity concerning calculation of damages.
“The current position largely relies on the whims of each arbitrator or tribunal. For example, in the notorious case of P&ID, damages were calculated on the basis of compound interest, which would have had a crippling effect to the tune of billions of dollars.
“It is with this belief that Nigeria reformed its Arbitration Act to reflect the importance of transparency. There is growing openness to fresh approaches beyond traditional arbitration.”
The minister said states had acknowledged that ISDS reform was not optional, as It was essential for maintaining the legitimacy of the international investment regime.
The minister stated, “Nigeria sees this consensus as a positive development: it signals that the global community understands the need for recalibration to ensure fairness, predictability, and development alignment.
“Many states, Nigeria included, believe that incremental adjustments will not address the structural imbalances embedded in the current system. There is increasing support for systemic reform, including clearer treaty standards, improved procedural safeguards, stronger accountability mechanisms, and more balanced rights and obligations for investors and states. This reflects a desire for a dispute settlement system that is durable and future proof.”
Fagbemi said Nigeria saw significant value in the innovations, particularly in reducing costs, preventing escalation, and strengthening cooperative problem solving.
“Strengthening national judicial institutions is central to building long term rule of law capacity and reducing over reliance on external arbitration,” he said.
The AGF advised that there must be consideration for the integration of public interest in ISDS, as it must reflect contemporary global priorities, including climate action, environmental protection,
human rights obligations, community welfare, and sustainable development.
Fagbemi added, “Nigeria strongly supports reforms that ensure investment protections do not undermine legitimate public interest regulation. And this is clearly reflected in the 2016 Nigerian Model Bilateral Investment Trade (BIT), which is currently under review after 10 years of being in use.
“There is a growing recognition that the challenges are shared, solutions must be collective, and reform must balance the needs of capital importing and capital exporting countries.”
