Nigeria wins $6.2m arbitration against UK tech firm in e-procurement contract dispute

Nigeria has secured a $6.2 million arbitration victory against a United Kingdom-based technology company over a disputed national e-procurement contract.

The dispute involved European Dynamics UK Ltd, which had filed claims against the Bureau of Public Procurement (BPP) over an electronic government procurement (e-GP) system project.

In a statement issued on Sunday, Kamarudeen Ogundele, special adviser to the president (communication and publicity), office of the attorney-general of the federation and minister of justice, said the “favourable” judgement was delivered by Funmi Roberts (sole arbitrator) on February 3, who sat at the International Centre for Arbitration and Mediation, Abuja.

Ogundele said in the ruling, which is final and not subject to appeal, the tribunal dismissed the contractor’s claims in their entirety, relieving Nigeria of potential financial exposure estimated at over $6.2 million (approximately N9.3 billion) in claimed payments and damages.

According to him, the sole arbitrator held that the claims lacked merit and upheld Nigeria’s position on key contractual obligations.

He added that Nigeria’s legal team was led by Johnson & Wilner LLP, a Nigerian business and technology law firm, with Basil Udotai Esq., Founding Partner, leading the arbitration together with the firm’s strategic partners and associates.

According to Ogundele, the disagreement arose from a contract for the design, development, customisation, supply, installation and maintenance of a national e-GP platform intended to enhance transparency and efficiency in federal procurement processes.

The project was financed with support from the World Bank.

European Dynamics UK Ltd had claimed about $2.4 million for alleged milestone completions, $3 million in general damages and an additional $800,000 in settlement claims.

Ogundele said Adebowale Adedokun, director-general (DG) of the BPP, inherited the stalled project and ongoing arbitration proceedings upon assuming office.

Before Adedokun’s appointment, there had been moves towards an out-of-court settlement. However, the BPP opted to proceed with arbitration, insisting that payments must be tied strictly to verified deliverables.

Central to the dispute was the user acceptance test (UAT), which the BPP said revealed significant functional deficiencies, including omissions and performance-related errors in the software.

The bureau argued that, unlike traditional supply contracts, software customisation projects are performance-based, noting that delivery can only be confirmed after a satisfactory UAT demonstrates compliance with technical and statutory requirements.

The tribunal agreed with Nigeria’s position, holding that the identified deficiencies were the contractor’s responsibility to fix at no additional cost.

It further ruled that the vendor, as the technical expert, bore the obligation to ensure compliance with contractual requirements, irrespective of any earlier technical documentation that may have been approved.

On the alleged merger of project phases, the tribunal said, “Nothing in the contract suggests that such a merger is permissible, particularly given that payment is structured in phases. Consequently, the contractual framework was distorted.”

Speaking during a formal presentation of the award to Lateef Fagbemi, attorney-general of the federation (AGF) and minister of justice, Adedokun described the outcome as a significant milestone.

“This particular vendor has taken various African countries to court and won every single case,” he said.

“Nigeria is the first to defeat them. We stood our ground against one of the best legal teams in the world because we believed in the expertise of our own Nigerian legal professionals.”

Adedokun thanked Fagbemi for approving the continuation of the arbitral process, noting that Nigeria would have lost billions of naira if it had conceded.

Responding, Fagbemi commended the BPP leadership and the legal team for what he described as courage and professionalism.

“Nigeria is a country blessed with both natural and human resources,” the minister said.

“This win sends a clear message to the international community: Nigeria has resonated. It is no longer business as usual.

“By standing up to European Dynamics, we have instilled courage in other African nations to protect their own resources.”