9th June, 2021
The Mambilla Power Project has suffered another major setback as Sunrise Power Transmission Company of Nigeria Ltd (SPTCL) has filed a new $400 million lawsuit against the Federal Government of Nigeria at the International Chamber of Commerce (ICC)’s International Court of Arbitration, Paris, France.
SPTLC approached the ICC after it alleged the Federal Government reneged on an agreement both parties mutually reached in January 2020. In an ICC document dated June 2 on the matter entitled “Case Information”, the international court said the parties agreed that all disputes arising “out of or in connection with the present terms of settlement shall be finally settled under the rules of arbitration of the International Chamber of Commerce”. Parties also agreed to expedited procedure.
According to documents sighted by this publication, the federal government, under the terms of settlement, agreed to pay Sunrise Power $200 million within 14 days of the execution of the terms of the agreement they reached on January 21, 2020.
The FG also agreed to pay a penalty of 10 per cent in case of a default in fulfilling the settlement agreement. The third major component of the agreement was the restoration of Sunrise as the local content partner for the $5.8 billion project.
Abubakar Malami, the Attorney-General of the federation and Minister of Justice signed on behalf of the FG with Sale Mamman, the Minister of Power while Leno Adesanya signed as Chairman and CEO of Sunrise. It was a precondition to withdraw its arbitration against Nigeria at ICC.
Sunrise claimed that the FG reneged on all the terms of the settlement. It stated that the last two of the three conditions the company reached with the FG were first removed from the revised settlement agreement presented to President Muhammadu Buhari.
Furthermore, it said the Attorney General wrote SPTCL a month after the agreement was reached to review the negotiation on the ground of the “global economic downturn which has resulted in the re-channeling of resources for combating the global Covid-19 pandemic, coupled with the fact that the Federal Government’s crude oil earnings have slumped from the meltdown”.
The request for review was based on the response from President Buhari that the federal government did not have $200 million to pay Sunrise Power.
SPTCL swiftly warned the FG not to flout the agreement both parties mutually reached.
The company first dragged Nigeria to the ICC on October 10, 2017 to seek a $2.354 billion award for breach of a 2003 contract to construct the 3,050MW plant in Mambilla, Taraba state, on a “build, operate and transfer” basis.
The company also joined Sinohydro Corporation Limited, the Chinese company handling the project, in the arbitration.
In an effort to resolve legal encumbrances, both parties worked behind the scenes to work on the settlement terms which culminated in the January 2020 agreement.
The 3,050 MW Mambilla Power Project is the largest Power plant in Nigeria and it is the flagship power generation project of the Muhammadu Buhari government.