The Federal Government under President Muhammadu has settled a long-standing contractual dispute with a foreign investor group in the steel space of N2.24trn ($5.258) billion for N210bn ($496m).
This was disclosed by Attorney General of the Federation and Minister of Justice, Abubakar Malami on Sunday, September 4, 2022.
He said that the mediation proceedings were under the International Chamber of Commerce’s 1(ICC) Alternative Dispute Resolution (ADR) framework led by Mr Phillip Howell-Richardson. The settlement agreement, he said, came into effect on 19 August 2022.
According to him, the settlement has succeeded in reducing the claim in mediation brought by the international firm of King and Spalding, legal representatives of the Global group by 91%.
Malami revealed that a claim for over $10 billion was threatened in arbitration before the International Chamber of Commerce, International Court of Arbitration, Paris, in respect of five major contracts from 2004 to 2007, covering steel, iron ore, and rail.
He recalled that the seeds of the disputes were traceable to five contracts entered into by the 1999 – 2007 administration that gave complete dominance over the Nigerian steel space to one company group, the Global Steel group.
In 2008 according to the AGF, “a new administration proceeded to terminate these contracts contrary to legal advice supplied by the Federal Ministry of Justice, which cited the termination cost in the form of damages.
A statement issued by Dr Umar Gwandu, media aide to Malami, believed that had the government of that day not terminated the Ajaokuta Share Purchase Agreement on 1st April 2008, and waited for just 55 days to terminate, it would have terminated lawfully and the Government would have collected more than $26 million USD from Global Steel.
“This was because the firm appeared unable to pay the first tranche for the Ajaokuta shares before the first anniversary of the agreement (25th May 2008).