TheCable

A company accused of funding legal claims against poor countries with corrupt governance structures has been engaged by Sunrise Power in a settlement arbitration against the government of Nigeria. 

Burford Capital, with offices in Guernsey, New York City, Chicago and London, has financed cases against Argentina, Bolivia, and Ecuador and will now back Sunrise at the ICC International Court of Arbitration, Paris, France, over the disputed Mambilla hydropower project.

Sunrise, promoted by Leno Adesanya, had on October 10, 2017 taken Nigeria to arbitration for “breach of contract” in relation to a 2003 agreement to construct the 3,050MW plant in Mambilla, Taraba state, on a “build, operate and transfer” basis for $6 billion.

Nigerian authorities insist that the contract award was irregular and did not pass through due process while the Economic and Financial Crimes Commission (EFCC) has since opened investigations into the conduct of the government officials involved.

Olu Agunloye, the minister of power at the time, awarded the contract a day after the federal cabinet reportedly told him to step down his request for approval and explore other sources of funding for the project.

In his letter to Sunrise, he also listed pre-conditions for the contract to be consummated and none was met by the firm.

But Sunrise headed to court when a bid process for the civil works was announced by the government in 2007 and a series litigation has stalled the project.

To get the project off the ground, the federal government had attempted to settle the arbitration in 2020 with a compensation offer of $200 million but a lack of funds is believed to have truncated it.

The investigation of government officials by the anti-graft agency has also introduced a new dimension to the case.

In the P&ID arbitration, a fine rising up to $10 billion was awarded against Nigeria but there was some respite after the EFCC charged several officials involved in the failed gas processing agreement to court on allegations of corruption. Some have been convicted.

BURFORD CAPITALISING ON CORRUPTION?

Sunrise, after instituting a $400 million settlement arbitration against Nigeria having failed to get the $200 million compensation, withdrew the case “without prejudice”, reportedly over a lack of funds.

Sunrise, with no known record of having executed any power project since it was founded, then refiled the settlement arbitration after getting funding from Burford Capital.

Sarmiento Investments, a subsidiary of Burford, will finance the litigation for Sunrise, whose total assets in its company filing in Nigeria amount to just N1 million (less $2,000) with zero turnover.

Burford appears to fund arbitral claims through a subsidiary, apparently to limit the ability of opponents in litigation to reach its own funds in the event of an adverse costs award.

Questions are being raised over the profile and records of Sunrise by officials of the Nigerian government, some of whom told TheCable they find it “strange” that Burford would choose to fund an arbitration whose underlying transaction is a subject of ongoing corruption investigation.

“Burford appears neck-deep in financing cases against poor countries. They need to examine their ethics,” a senior government officials told TheCable.

Burford was founded by Christopher Bogart in 2009 and touts its global legal finance team as “the largest and most experienced in the world”.

In August 2019, a group of investors led by US hedge fund Muddy Waters Research accused the firm of being a “poor business masquerading as a great one”.

Same year, Daniel Hall, who was the co-head of Burford’s global corporate intelligence , was accused of possessing and distributing an explicit video in relation to the enforcement of a judgment worth $28.8 million against a Miami-based oil billionaire who was captured in the video, although Burford denied any impropriety.

The firm has funded successful cases against Argentina and Kyrgyzstan, and got a massive $103 million cut from the divorce settlement between Farkhad Akhmedov, a Russian businessman, and Tatiana Akhmedova in 2021.