Amanze Chinonye
Nigeria has secured a major victory in international arbitration after a tribunal dismissed in its entirety a $6.2 million claim filed against the country by European Dynamics UK Ltd over a stalled national e-procurement project, Prime Business Africa reports.
The arbitration panel ruled in favour of Nigeria, relieving the Federal Government of potential financial exposure estimated at over $6.2 million (approximately ₦9.3 billion) in disputed payments and damages. The decision is final and not subject to appeal.
The dispute arose between European Dynamics UK Ltd and the Bureau of Public Procurement (BPP) over a contract for the design, development, customisation, installation and maintenance of a national electronic Government Procurement (eGP) system. The project was financed with support from the World Bank and aimed at strengthening transparency and efficiency in federal procurement processes.
Join our WhatsApp ChannelBackground to the Dispute
Upon assuming office, the Director-General of the BPP, Dr Adebowale Adedokun, inherited both the stalled technology project and ongoing arbitration proceedings. The contractor had claimed about $2.4 million for alleged milestone completions, $3 million in general damages, and an additional $800,000 in settlement claims.
Although discussions had reportedly been held prior to Adedokun’s appointment regarding an out-of-court settlement, the bureau opted to proceed with arbitration, maintaining that payments must strictly correspond to demonstrable value delivered.
Central to the dispute was the outcome of the User Acceptance Test (UAT), which the BPP said revealed significant functional deficiencies in the software, including critical omissions and performance-related errors.
Nigeria argued that, unlike conventional supply contracts, software customisation projects require performance validation, and delivery can only be deemed complete upon successful UAT confirming compliance with technical and statutory requirements.
The tribunal upheld Nigeria’s position, ruling that the identified deficiencies were the contractor’s responsibility to remedy at no additional cost. It further held that as the technical expert, the vendor bore the obligation to ensure that the system complied fully with contractual specifications, regardless of earlier technical documents approved by the BPP.
The panel also found no evidence that the bureau consented to merging multi-phase modules into a single phase, noting that such a merger would distort the contract’s phased payment structure.
All claims by European Dynamics UK Ltd were consequently dismissed.
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‘Nigeria Can No Longer Be Taken for Granted’ – BPP DG
Speaking during a formal presentation of the arbitral award to the Attorney General of the Federation and Minister of Justice, Prince Lateef Fagbemi (SAN), Adedokun described the outcome as a significant milestone for public sector technology contracting.
According to him, the company had previously won similar disputes in other African jurisdictions, adding that Nigeria was the first to successfully defend such a claim against it.
He expressed appreciation to the Attorney General for approving the continuation of the arbitral proceedings, noting that the decision saved the country billions of naira that can now be redirected to national development priorities.
AGF Hails Verdict as Institutional Milestone
Responding, the Attorney General of the Federation and Minister of Justice, Prince Lateef Fagbemi (SAN), commended the BPP leadership and Nigeria’s legal team for what he described as a courageous and professionally executed defence.
He said the ruling sends a strong message to the international community that Nigeria will firmly protect its financial and contractual interests.
The AGF also attributed the outcome to the institutional strengthening efforts under President Tinubu, stating that the administration remains committed to reinforcing accountability and rule of law in public contracting.
Implications for Public Procurement
Legal representatives for the BPP said the ruling underscores the importance of rigorous User Acceptance Testing, clear milestone definitions, and adherence to performance-based standards in government technology projects.
They advised that lessons from the arbitration should be integrated into ongoing reforms of the e-procurement framework to strengthen oversight, improve contract management, and minimise the risk of future disputes.
The victory marks one of the most significant recent arbitration outcomes involving Nigeria’s public procurement system and signals a more assertive approach in managing complex international technology contracts.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
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