Nigeria Wins €185.7m, N4bn Arbitration Over 1981 Ajaokuta Steel Contract

The Federal Government of Nigeria has secured a major legal victory in a long-standing dispute over a 1981 civil works contract at the Ajaokuta Iron and Steel Complex.

The contract, originally awarded to a joint venture between Fougerolle Nigeria Ltd and the French company Fougourolle SA, predates the creation of Kogi State, when the area was still part of Kwara State.

Attorney General and Minister of Justice, Lateef Fagbemi, announced on Friday that a tribunal organised under the Alternative Dispute Resolution Centre of the Federal High Court issued a favourable final award for the Federal Government on November 11.

Fagbemi explained that Fougerolle initiated arbitration on December 12, 2022, nearly 18 years after the contract was terminated on January 30, 2004, seeking additional payments of N4 billion and €185 million.

The company claimed unverified amounts totaling N3,846,098,403 and €185,733,496, contrary to prior contract terms and previous settlements.

Following the contract termination, the Federal Government had engaged PricewaterhouseCoopers (PwC) to verify any outstanding obligations to Fougerolle.

This process led to a payment of N3,894,600,000 to the company via FGN Bonds on September 11, 2006, and the company signed an indemnity on September 8, 2006, acknowledging the payment as full and final settlement.

Despite this, Fougerolle revived its claim more than 16 years later.

The tribunal upheld the Federal Government’s preliminary objection, ruling that the claim was statute-barred, lacked a valid cause of action, and that the indemnity and FGN bond payment extinguished any further debt.

Fagbemi hailed the ruling as a significant legal and financial victory, emphasizing the government’s commitment to defending public resources against baseless claims.