INTERNATIONAL 18/10/2022
$5.8b Mambilla Power: ICC Declines to Stop Firm’s Arbitration Against Fed Govt
The International Court of Arbitration administered by the International Chamber of Commerce (ICC), Paris, France, has declined to stop an arbitration proceeding filed by Sunrise Power and Transmission Company Limited (SPTCL) against the Federal Government on the $5.8 billion 3,050MW Mambilla hydro-electric power project.
In an October 13, 2022 letter, the ICC told the parties that there were no “sufficient sensitive elements” adduced by the Federal Government to halt proceeding.
Sunrise and its Chairman Leno Adesanya had been involved in a legal battle with the Federal Government over the alleged unlawful termination of the contract which was signed on May 22, 2003, but re-awarded to Messrs China Gezhouba Group Corporation/China Geo-Engineering Corporation (CGGC/CGC).
The company challenged the contract termination on May 28, 2007, culminating in a 14-year delay, with the new awardee effectively barred from executing the contract.
The firm alleged in a statement that after its withdrawal from its $500 million Settlement Agreement arbitration at the ICC in September 2021, the FGN legal team led by Mr. Supo Shasore (SAN), and the foreign firm of White and Case decided to invite Sunrise back to the ICC by claiming $1.6 million in legal fees because Sunrise withdrew the $500 million suit.
It said contrary to the Federal Government’s allegation, the ICC on October 13 ruled against FGN objections and called for the expedited arbitration procedure to be adopted in the $500 million settlement agreements arbitration to commence immediately.
On November 23, 2012, the Federal Government signed a General Project Execution Agreement (GOEA) with Sunrise and its Chinese consortium partners on the execution of the Mambilla hydropower project. “However, on the 12th of November 2017, the FGN signed a $5.8 billion EPC contract with another Chinese Consortium despite numerous written warnings from the current Attorney General of the Federation to the Federal Ministry of Power, Works and Housing in 2016 and 2017 to respect the GPEA contract with Sunrise,” a document said.
Sunrise resorted to arbitration against FGN and the Sinohydro consortium of China in 2018, claiming $2.3 billion in damages.
With the intervention of the Chinese President, who sent a special envoy to President Muhammadu Buhari in July 2019, FGN and Sunrise signed a settlement agreement in January 2020; and this settlement was advised to both the Chinese Ambassador to Nigeria and Chairman of China Eximbank, who had made the settlement condition precedent to any loans for the Project. However, the FGN defaulted.
