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EXCLUSIVE: With COVID-19 pandemic, Nigeria seeks to review Sunrise $200m settlement

EXCLUSIVE: With COVID-19 pandemic, Nigeria seeks to review Sunrise $200m settlement
April 25
10:45 2020
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Abubakar Malami, attorney-general of the federation, has written Leno Adesanya, chairman of Sunrise Power Transmission Company of Nigeria Ltd (SPTCL), to seek a review of the $200 million settlement reached over the Mambilla power project dispute.

TheCable reported on Wednesday that President Muhammadu Buhari has declared that Nigeria does not have the money to pay Sunrise to withdraw its $2.354 billion claim against the country at the International Chamber of Commerce (ICC) in Paris, France, over an alleged breach of contract.

Same day, Sunrise’s legal counsel demanded that Nigeria must commit to paying $200 million settlement claims by Friday, April 24, or face the consequences.

The dispute has stalled the $5.8 billion project — potentially Africa’s second biggest hydroelectric power plant — as Sinohydro Corporation Limited, the Chinese company currently handling the project, is also joined as a party in the arbitration.

In his letter dated April 22, 2020 and marked “without prejudice”, Malami said: “Unfortunately, due to the unforeseen intervening circumstances and the attendant global economic downturn which has resulted in the re-channelling 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 melt down, resulting in the review of her budget, it has become inevitable that Federal Government should review the entire Negotiation after the pandemic has subsided. This is done in the best interest of the parties, and the anticipation of SPTCL’s goodwill in these times when companies and corporations worldwide seem to be displaying their most humane disposition of suspending profits for Corporate Social Responsibility (CSR).”

The AGF requested that Sunrise should “hold all further actions to enable us come together to resolve the issued amicably to the benefit of all”.

Sunrise Power Transmission Company of Nigeria Ltd (SPTCL) dragged Nigeria to arbitration in October 2017 seeking the award 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.

When Babatunde Fashola was minister of power, Sunrise reportedly asked for a compensation of $80 million but he was said to have insisted that the company did not do any work at all.

After Fashola’s exit, representatives of the federal government and Sunrise met in London agreed on a $200 million “full and final payment” in November 2019 for the arbitration to end.

Although Buhari gave the go-ahead for the meeting to be held to reach a final settlement, senior presidency officials told TheCable on Friday that his final approval was neither sought nor received for the execution of the agreement which has now become binding on the country.

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