Mambilla $200m Settlement: Malami, Fagbemi Differ Over Controversial Deal

Former Attorney-General of the Federation, Abubakar Malami, and his successor, Lateef Fagbemi, have offered contrasting accounts of the controversial $200 million settlement between the federal government and Sunrise Power and Transmission Company Limited over the Mambilla Hydroelectric Power Project.

While Malami defended the settlement negotiations as an attempt to protect Nigeria’s interests and end prolonged litigation, Fagbemi said the dispute had held the Mambilla project “hostage” and contributed to the country’s energy challenges.

Their positions followed a September 16 final award by an International Chamber of Commerce arbitration tribunal in Paris, which rejected Sunrise Power’s claims against Nigeria and ordered the company and its promoter, Leno Adesanya, to reimburse the Federal Government $11.82 million in legal fees and $414,125 in arbitration costs.

The dispute centres on the proposed 3,050-megawatt Mambilla hydroelectric power project in Taraba State, whose development dates back to a 2003 agreement under which Sunrise was to construct the project on a build-operate-transfer basis.

Sunrise subsequently commenced arbitration against Nigeria in 2017, demanding about $2.35 billion over the project.

The dispute later resulted in a January 2020 settlement under which Nigeria was to pay Sunrise $200 million. A March 2020 addendum introduced a further $200 million default provision, potentially raising Nigeria’s exposure to $400 million plus interest.

Reacting on Tuesday, Malami, through his Special Assistant on Media, Mohammed Bello Doka, rejected suggestions that his actions as AGF were motivated by a corrupt agreement or the prospect of personal financial benefit.

“Malami rejects any suggestion that his official actions were undertaken pursuant to a corrupt agreement or in exchange for personal financial benefit,” the statement said.

The former AGF said the dispute predated his tenure and had passed through several administrations, attorneys-general and government ministries.

According to him, the government’s consideration at the time was whether an “asserted multibillion-dollar exposure, continuing litigation, financing difficulties and delays to the Mambilla project could be brought to an end through a substantially smaller negotiated settlement.”

Malami also stressed that the $200 million settlement was never paid to Sunrise and said there was no evidence before the tribunal linking him to any financial benefit from the proposed arrangement.

“One obvious factual question is whether any money or other financial benefit from Sunrise, Adesanya or any connected entity was ever received by Malami pursuant to the alleged arrangement,” he said.

“The settlement money itself was never paid by the Federal Government to Sunrise.”

He further acknowledged that former President Muhammadu Buhari did not approve the payment, adding that Buhari subsequently directed government lawyers to resist Sunrise’s attempt to enforce the settlement against Nigeria.

Malami also cautioned against interpreting the tribunal’s findings as a criminal conviction, noting that the proceedings were commercial arbitration between the parties to the dispute.

He said he was neither a party to the proceedings nor given an opportunity to present his own side of the matter.

Fagbemi, however, said the prolonged dispute had imposed substantial costs on Nigeria, particularly through delays to the power project.

According to the current AGF, the Mambilla project was “held hostage” by what he described as “relentless litigation and arbitration” instituted by Sunrise.

He said the tribunal established that the settlement agreement and its addendum were not binding on Nigeria because the former government officials who signed them lacked the requisite authority.

“As a result, the project has been unable to achieve financial close, depriving Nigeria and its people of the enormous economic benefits of 3,050 megawatts of clean, renewable hydroelectric power,” Fagbemi said.

He added that the delay had resulted in “lost power generation, foregone industrial output, and continued energy poverty.”

Fagbemi said the tribunal’s decision demonstrated that Nigeria would not be “a soft target for predatory litigation and arbitration.”

He also commended President Bola Tinubu for maintaining that Nigeria should not succumb to what he described as “fraudulently contrived contractual agreements” and claims arising from them.

In its 616-page award, the ICC tribunal found the settlement agreements unenforceable, including on grounds of corruption and violation of Nigerian public policy.

The tribunal also rejected Sunrise’s $400 million claim and directed the company and Adesanya to bear their own legal expenses.

Malami said he would issue a comprehensive response to the tribunal’s individual findings after reviewing the full award and the underlying records.