Nigeria Wins International Arbitration, Saves $6.2 Million in e-Procurement Dispute

Nigeria has secured a decisive victory in an international arbitration case against European Technology Contractor European Dynamics UK Ltd, potentially saving the country over $6.2 million (approximately ₦9.3 billion) in financial liabilities.

The dispute, which stemmed from a national e-Procurement project overseen by the Bureau of Public Procurement (BPP), concluded with the tribunal dismissing all claims brought by the contractor. The ruling is final and not subject to appeal.

In a statement issued on Sunday, Kamarudeen Ogundele, Special Assistant to the President on Communication and Publicity (Office of the Attorney General of the Federation), confirmed the outcome.

“In another victory for the administration of President Bola Ahmed Tinubu, Nigeria, through the BPP, has yet again won a complex international arbitration,” the statement read. “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.”

European Dynamics had sought $2.4 million for alleged milestone completions, $3 million in general damages, and an additional $800,000 in settlement claims.

Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, welcomed the ruling, asserting that it signals a new era of accountability. “It is no longer business as usual,” he declared.

Nigeria’s legal team was led by Johnson & Wilner LLP, with Basil Udotai, Esq., serving as lead counsel.

Background to the Dispute

The contract involved the design, development, and maintenance of a national electronic Government Procurement system, a World Bank-supported initiative aimed at improving transparency and efficiency in federal procurement processes.

Upon assuming office, BPP Director-General Dr Adebowale Adedokun inherited both the stalled project and the ongoing dispute. Central to the case was a User Acceptance Test conducted by the bureau, which reportedly uncovered significant functional deficiencies, including critical system omissions and performance errors.

The BPP maintained that software customisation contracts are performance-validated, meaning completion is only confirmed upon satisfactory User Acceptance Testing that demonstrates compliance with contractual requirements.

The tribunal upheld Nigeria’s position, ruling that the identified deficiencies were the vendor’s responsibility to rectify at no additional cost. It further held that the contractor, as the technical expert, bore the obligation to ensure compliance, regardless of earlier approvals of technical documents.

The tribunal also found no evidence that the BPP had consented to merging multi-phase modules into a single phase, noting that payments were structured accordingly. “Nothing in the contract suggests that such a merger is permissible, particularly given that payment is structured in phases. Consequently, the contractual framework was distorted,” the ruling stated.

Significance of the Ruling

During a formal presentation of the award to the Attorney General, Dr Adedokun highlighted the broader implications of the victory.

“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.”

He thanked the AGF for approving the continuation of the arbitral proceedings, noting that the decision prevented the loss of billions of naira, which can now be redirected toward national development.

In response, Mr Fagbemi commended the BPP leadership and the legal team for their courage and diligence.

“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 stated. “By standing up to European Dynamics, we have instilled courage in other African nations to protect their own resources.”

The statement noted that the ruling reinforces the importance of rigorous User Acceptance Testing, clear milestone definitions, and expert-driven software delivery standards in government technology projects.

Lessons from the arbitration are expected to inform ongoing e-procurement reforms, strengthening contract performance oversight and minimising the risk of future disputes.