Nigeria has recorded another international arbitration success after defeating claims by European Dynamics UK Ltd, thereby avoiding a potential payout exceeding $6.2 million.
The British technology company had sought $2.4 million for alleged milestone completions, $3 million in general damages and $800,000 in settlement claims linked to an e-Procurement project handled by the Bureau of Public Procurement (BPP).
The sole arbitrator, Funmi Roberts, dismissed all claims in their entirety during proceedings at the International Centre for Arbitration and Mediation, Abuja.
Nigeria’s defence was led by Johnson & Wilner LLP, with Basil Udotai, Esq., serving as lead counsel.
Reacting to the decision, Attorney-General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi (SAN), described the award as “final and not subject to appeal.”
The ruling adds to Nigeria’s growing record of arbitration victories, following its landmark win in October 2023 against Process & Industrial Developments (P&ID), which nullified an arbitral award of over $11 billion arising from a disputed 2010 gas contract.
In a statement issued by the Special Assistant to the President on Communication and Publicity (Office of the Attorney General of the Federation), Kamarudeen Ogundele, the AGF said the outcome sends a firm message to contractors engaging with the country.
“In the ruling, which is final and not subject to appeal, the tribunal dismissed the contractor’s claims in their entirety, relieving Nigeria of potential financial exposure estimated at over $6.2 million,” Ogundele quoted the AGF as saying.
European Dynamics had been engaged by the BPP to design, develop/customise, supply, install and maintain a national electronic Government Procurement (e-GP) system, financed with support from the World Bank. The initiative was intended to strengthen transparency, accountability and efficiency in federal procurement operations.
The dispute centred on the User Acceptance Test (UAT), which the BPP said uncovered major functional gaps, including critical omissions and performance defects.
When BPP Director-General, Adebowale Adedokun, assumed office, he inherited both the stalled project and the ongoing arbitration. Although earlier discussions had explored the possibility of settlement, the Bureau elected to proceed with arbitration, maintaining that payments must align strictly with verified deliverables.
Nigeria’s legal team contended that software customisation contracts differ from conventional supply agreements, arguing that delivery is only complete after successful UAT validation.
The tribunal upheld that position, ruling that the deficiencies identified during testing were the vendor’s responsibility to correct at no additional cost. It further held that the contractor, as the technical expert, was obligated to ensure full compliance with contractual terms, irrespective of previously approved technical documents.
The arbitrator also determined that there was no evidence the BPP agreed to merge multi-phase modules into a single phase. The tribunal ruled that such restructuring was not permitted under the contract, particularly since payments were structured in phases, and concluded that the contractual framework had been distorted.
Fagbemi praised the BPP leadership for opting to pursue arbitration rather than settle.
“Nigeria is a country blessed with both natural and human resources. This win sends a clear message to the international community: Nigeria has resonated. It is no longer business as usual,” he said.
“By standing up to European Dynamics, we have instilled courage in other African nations to protect their own resources.”
The AGF also commended President Bola Ahmed Tinubu for backing institutional reforms within the justice sector.
Adedokun described the verdict as historic, noting the company’s previous successes in similar disputes across the continent.
“This particular vendor has taken various African countries to court and won every single case. Nigeria is the first to defeat them,” he said.
“We stood our ground against one of the best legal teams in the world, because we believed in the expertise of our own Nigerian legal professionals.”
Ogundele added that the decision underscores the importance of strict UAT procedures, clearly defined milestones and expert-led software delivery standards in public technology projects. He said insights from the case would inform ongoing e-procurement reforms to enhance contract oversight and prevent future disputes.
