Nigeria Wins $2.35bn Arbitration Case Against Sunrise Power

Nigeria got a favourable judgement with the International Chamber of Commerce (ICC) in Paris, France, turning down the award of $2.35 billion sought by Sunrise Power over the Mambilla hydropower project at the

In its judgement, the tribunal ordered the promoter to refund Nigeria’s legal fees of $11.8 million.

In the decision signed by the three panellists, the tribunal dismissed Sunrise’s claim for a declaration that Nigeria breached its contractual obligations under the settlement agreement and the addendum.

Then the tribunal turned down Sunrise’s claim for an order that Nigeria pay the company $400 million in satisfaction of the settlement sum of $200 million and the default sum of $200 million.

They further declared that Leno Adesanya, the promoter of Sunrise, is bound by the arbitration agreement with Nigeria pursuant to the settlement agreement and the addendum, and that the tribunal has jurisdiction over Nigeria’s counterclaim against him and his firm.

The tribunal ordered Sunrise and Adesanya to reimburse Nigeria 75 per cent of the legal fees and expenses incurred by the country in this arbitration.

The legal fees were given as $11,819,506.51, of which $2,500,000 will be covered directly from the amount held in escrow by the ICC and released upon notification of the final award.

Sunrise and Adesanya were ordered to pay Nigeria the remaining $9,319,506.51 plus interest at an annual rate of 10 per cent, “compounded annually, from the date of the notification of this Final Award until such amount is paid in full”.

The arbitration costs are to be shared by Sunrise (75 per cent) and Adesanya (25 per cent).

The cost was fixed at $1,656,500.

The panel was presided over by Melaine van Leeuwen, with Stavros Brekoulakis and Simon Nesbitt as co-arbitrators.

Nigeria was represented by a team of lawyers led by Elizabeth Oger-Gross and Tolu Obamuroh, now of Paul Hastings LLP.

Sunrise had, on 10 October 2017, started arbitration against Nigeria at the ICC International Court of Arbitration seeking a $2.354 billion award for “breach of contract” in relation to a 2003 agreement to construct the 3,050MW plant in Mambilla, Taraba state, on a “build, operate and transfer” basis valued at $6 billion.

In the second arbitration, the company is seeking a $400 million settlement, citing the Nigerian government’s failure to honour the settlement agreement that both parties entered into in 2020 to end the arbitration.

EXPLAINER

1. Sunrise Power took Nigeria to arbitration in 2017, seeking $2.354 billion over an alleged breach of a 2003 agreement to develop the 3,050MW Mambilla hydropower project in Taraba State.
2. The case centred on the 2003 project agreement, the subsequent 2020 settlement agreement and addendum, and the parties’ obligations under those documents.
3. Sunrise argued that Nigeria breached the settlement agreement and sought $400 million, while Nigeria contested the claims and pursued a counterclaim involving Sunrise promoter Leno Adesanya and his firm.
4. The three-member ICC tribunal rejected Sunrise’s $2.35 billion and $400 million claims, ruled that Adesanya was bound by the arbitration agreement and ordered Sunrise and Adesanya to reimburse 75 per cent of Nigeria’s $11.82 million legal costs.
5. The ruling means Nigeria avoids the multibillion-dollar liability sought by Sunrise, while the company and Adesanya face substantial legal and arbitration costs arising from the long-running Mambilla project dispute.