Nigeria: Nigeria has successfully won a $6.2 million arbitration case against European Dynamics UK Ltd, a prominent international technology contractor, following a dispute with the Bureau of Public Procurement (BPP). The case revolved around a national e-Procurement project.
According to News Agency of Nigeria, Mr. Kamarudeen Ogundele, Senior Assistant on Communication and Publicity to the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, SAN, provided a statement regarding the victory. The ruling, which is final and not subject to appeal, was delivered by Mrs. Funmi Roberts, the Sole Arbitrator, at the International Centre for Arbitration and Mediation in Abuja. The tribunal dismissed the contractor’s claims, thereby relieving Nigeria of potential financial exposure amounting to over $6.2 million.
The conflict with European Dynamics UK Ltd began over issues related to the design, development, customisation, supply, installation, and maintenance of a national electronic Government Procurement (eGP) system supported by the World Bank. The project sought to enhance transparency, accountability, and efficiency in federal public procurement processes. Central to the dispute was the User Acceptance Test (UAT), which revealed significant functional deficiencies, including critical omissions and errors affecting system performance.
The tribunal sided with Nigeria, asserting that these deficiencies were within the vendor’s responsibility to address without additional costs. The contractor, as the technical expert, was obligated to ensure that the system met contractual requirements, regardless of any previously approved technical documents. No evidence was found to suggest that the bureau had consented to merge multi-phase modules into a single phase, especially as payments were structured in phases.
Dr. Adebowale Adedokun, Director-General of the BPP, inherited the stalled technology project and ongoing arbitration proceedings upon taking office. He decided to continue with the arbitral process rather than pursuing an out-of-court settlement, emphasizing that payments should be tied to demonstrable value delivered.
During a formal presentation of the award to the Minister of Justice, Adedokun highlighted the significance of this victory as a signal for public sector technology contracting. He noted that Nigeria is the first African country to defeat European Dynamics in court, a feat achieved through the expertise of Nigerian legal professionals.
The Attorney-General commended Adedokun’s determination and the legal team’s proficiency, emphasizing that Nigeria’s victory sends a strong message to the international community. It demonstrates that Nigeria is prepared to protect its resources and serves as an inspiration for other African nations.
The legal representative for the BPP advised incorporating lessons from the arbitration into ongoing e-procurement reforms to enhance contract performance oversight and minimize the risk of future disputes.