The Federal Government of Nigeria will make the payment for the settlement of $496 million reduction from the $5.258 billion to an Indian steel investor within the next 21 days.
Sources in the Federal Ministry of Justice on Thursday informed Daily Trust that the statement released by the office of the Attorney General of the Federation (AGF), Abubakar Malami (SAN) serves as a notice to the public with a view to elicit objections, if any.
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“The federal government is making everything transparent, that is why they will have another press conference when the payment will be finally made,” a source, who pleaded anonymity, said.
Malami had, in a statement on Sunday, through his media aide, Umar Gwandu, PhD, announced that the mediation agreement with the Global Steel Holdings Ltd on August 19, 2022, under the International Chamber of Commerce’s (ICC) Alternative Dispute Resolution (ADR) framework led by Mr Phillip Howell-Richardson.
The group returned to arbitration after the federal government failed to comply with an earlier term reached in 2013 following the termination of the concession awarded in 2004 for the revival of the National Iron Ore Mining Company (NIOMCO) in Ajaokuta and Itakpe.
“Nigeria succeeded in reducing the claim in mediation brought by the international firm of King and Spalding, legal representatives of the Global group, by 91%. A claim for over $10 billion was threatened in arbitration before the International Chamber of Commerce (ICC), International Court of Arbitration (ICA), Paris, in respect of five major contracts of 2004-2007– covering steel, iron ore, and rail,” he said.
The statement noted that had the government of that day not terminated the Ajaokuta Share Purchase Agreement on 1 April 2008 and waited for just 55 days to terminate, it would have terminated lawfully and the Government would have collected more than 26 million USD from Global Steel.
This was because the firm appeared unable to pay the first tranche for the Ajaokuta shares before the first anniversary of the agreement (25 May 2008). This failure would have given Nigeria a right to over $26m as liquidated damages under cl.12 of the Ajaokuta Share Purchase Agreement.
Malami explained that the office has always adopted some cost effective principles for the resolution of the contractual disputes and protecting the interest of taxpayers such as institutional mediation, choice of FGN counsel, the use of financial advisers with reputational capital,among others.
FGN terminated the concession for Ajaokuta to bring in another investor and allowed the firm to retain Itakpe Steel Complex over alleged asset stripping, inability to bring in foreign investment, and tax evasion.
The settlement is legal – Lawyers
Meanwhile, lawyers have explained that the settlement that has reduced the value which was claimed against Nigerian taxpayers over the contract termination was legal.
Dayo Akinlaja (SAN) said, “Amicable settlement is allowed whether in regular courts or arbitration tribunals before judgment is made.”
He added that although the motivating factor for the settlement may not be known by the public, “theoretically speaking, there is nothing wrong to settle in the way that has been done.”
For his part, Buhari Yusuf Esq said the Arbitration and Conciliation Act provides that with the consent of the parties, a settlement can acquire the status of consent judgement of the court of law subject to certain procedures.
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