Nigeria has secured a favourable outcome in its long-running arbitration dispute with Sunrise Power and Transmission Company Limited over the Mambilla Hydroelectric Power Project, after an International Chamber of Commerce (ICC) tribunal in Paris rejected the company’s major claims against the country.
The three-member tribunal dismissed Sunrise Power’s claim that Nigeria had breached its contractual obligations under a settlement agreement and an accompanying addendum.
The tribunal also rejected the company’s demand for $400 million, comprising a $200 million settlement sum and another $200 million default sum.
The decision further declared that Leno Adesanya, the promoter of Sunrise Power, is bound by the arbitration agreement with Nigeria under the settlement agreement and addendum. It also confirmed that the tribunal has jurisdiction over Nigeria’s counterclaim against Adesanya and his firm.
As part of the ruling, Sunrise Power and Adesanya were ordered to reimburse Nigeria 75 per cent of the legal fees and expenses incurred during the arbitration.
The legal costs were assessed at $11,819,506.51. Of that amount, $2.5 million will be covered directly from funds held in escrow by the ICC and released following notification of the final award.
Sunrise Power and Adesanya were ordered to pay the remaining $9,319,506.51, together with 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 tribunal also fixed the arbitration costs at $1,656,500, with Sunrise Power and Adesanya responsible for 75 per cent, while Nigeria will bear the remaining 25 per cent.
The panel was chaired by Melaine van Leeuwen, with Stavros Brekoulakis and Simon Nesbitt serving as co-arbitrators.
The dispute dates back to October 10, 2017, when Sunrise Power commenced arbitration proceedings against Nigeria at the ICC International Court of Arbitration, seeking about $2.354 billion over an alleged breach of contract relating to a 2003 agreement for the construction of the Mambilla hydropower plant in Taraba State.
The proposed 3,050MW project was valued at about $6 billion and was to be developed under a build, operate and transfer arrangement.
A second arbitration later arose from a 2020 settlement agreement between Sunrise Power and the Nigerian government. The company subsequently sought $400 million, alleging that the government had failed to honour the terms of the settlement.
The latest ruling has therefore removed the claims rejected by the tribunal, while also requiring Sunrise Power and its promoter to bear a substantial portion of Nigeria’s legal and arbitration costs.
Source: International Chamber of Commerce arbitration reports
