Nigeria has settled a long-standing $5.258 billion claim made by a foreign investor group over the ownership and control of Ajaokuta Steel Company and other steel plants.
Abubakar Malami, Attorney General of the Federation and Minister of Justice disclosed this in a press statement through his media aide, Dr Umar Jibrilu Gwandu, in Abuja.
Malami said the settlement ‘rescued’ Nigeria with about a 91 per cent reduction of the mediation claim from $5.258 billion to $496 million, which takes effect on August 19, 2022. The mediation proceeding was achieved through the International Chamber of Commerce’s (ICC) Alternative Dispute Resolution (ADR) framework led by Mr Phillip Howell-Richardson.
According to the AGF, “A claim for over $10 billion was threatened in arbitration before the International Chamber of Commerce, International Court of Arbitration, Paris, in respect of five major contracts from 2004–2007—covering steel, iron ore, and rail.”
“However, President Muhammadu Buhari’s government took strong steps to fight this claim so that it wouldn’t be passed on to a future government with rising interest.”
Recall that the completion of the construction of Ajaokuta Steel, which commenced in 1979, became a top priority of President Muhammadu Buhari when he began his democratic leadership in 2015.
However, the government did not fulfil the terms of the agreements, leading to a long-standing legal case involving both parties at the International Chamber of Commerce, International Court of Arbitration, Paris.
Malami said that ending the contracts in 2008 went against legal advice from the federal ministry of justice, which said that the costs would come in the form of damages.
The Attorney-General highlighted that if the previous government had not terminated the Ajaokuta share purchase agreement on April 1, 2008, and waited 55 days, it would have been terminated lawfully, and the government would have been able to collect more than $26 million from Global Steel as a settlement.
Malami added that the failure of the foreign firm to pay would have given Nigeria a right to over $26 million as liquidated damages under clause 12 of the Ajaokuta share purchase agreement.
Malami reaffirmed the President Muhammadu Buhari administration’s commitment to continue making assiduous efforts to protect the public interest and ensure that Nigeria is not robbed of its resources.
Recall that the disputes can be traced to five contracts signed between 1999 and 2007 under previous governments that gave complete dominance over the Nigerian steel space to one company group, the Global Steel group.