Nigeria wins $6.2m arbitration case against European tech giant

Nigeria has secured a major legal victory, winning a $6.2 million arbitration case against European Dynamics UK Ltd over a disputed national e-procurement project handled by the Bureau of Public Procurement (BPP).

The development was disclosed in a statement issued by Mr Kamarudeen Ogundele, Senior Assistant on Communication and Publicity to the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, SAN.

According to the ministry, the dispute stemmed from a contract awarded to the international technology firm for the design, development, customisation, installation and maintenance of a national electronic Government Procurement (eGP) system. The project, supported by the World Bank, was aimed at strengthening transparency, accountability and efficiency in federal public procurement processes.

The arbitration tribunal, presided over by Sole Arbitrator Mrs Funmi Roberts, sat at the International Centre for Arbitration and Mediation in Abuja and dismissed the contractor’s claims in their entirety. The ruling is final and not subject to appeal.

European Dynamics UK Ltd had sought about $2.4 million for alleged milestone completions, $3 million in general damages and an additional $800,000 in settlement claims. The tribunal’s decision, however, relieved Nigeria of financial exposure estimated at over $6.2 million, approximately ₦9.3 billion.

At the centre of the dispute was the User Acceptance Test (UAT), which reportedly revealed significant functional deficiencies, including critical omissions and system performance errors. The BPP argued that, unlike conventional supply contracts where delivery is based on physical handover, software customisation projects require performance validation before payments can be justified.

The tribunal upheld Nigeria’s position, ruling that the deficiencies fell within the vendor’s responsibility to correct at no extra cost. It further held that the contractor, as the technical expert, was obligated to ensure full compliance with contractual requirements, regardless of earlier technical documents approved by the BPP.

The panel also found no evidence that the bureau consented to merging multiple project phases into one, especially since the contract structured payments in phases. Consequently, all claims by the contractor were dismissed.

The Director-General of the BPP, Dr Adebowale Adedokun, who inherited the stalled project and ongoing arbitration upon assuming office, opted to continue with the arbitral process rather than pursue an out-of-court settlement, insisting that payments must strictly reflect verified value delivered.

During the formal presentation of the award to the Attorney-General, Adedokun described the outcome as a significant signal for public sector technology contracting. He noted that the contractor had previously won similar cases in other African countries, adding that Nigeria is the first to defeat the firm in arbitration.

Fagbemi commended the courage of the BPP leadership and the legal team, stating that the victory sends a clear message that Nigeria will firmly protect its financial and contractual interests.

Nigeria’s legal team was led by Johnson & Wilner LLP, with Basil Udotai, the founding partner, leading the arbitration alongside strategic partners and associates.

The ministry added that lessons from the arbitration would be incorporated into ongoing e-procurement reforms to strengthen contract performance oversight and reduce the risk of future disputes.