KEY POINTS
- Nigeria has successfully defeated European Dynamics UK Ltd in an arbitration case, saving the country from a potential $6.2 million (approx. ₦9.3 billion) financial exposure.
- The dispute centered on a stalled National Electronic Government Procurement (eGP) system project, with the contractor claiming payments for alleged milestones and damages.
- Sole Arbitrator Mrs. Funmi Roberts dismissed all claims in their entirety, marking Nigeria as the first African nation to defeat this specific contractor in court.
MAIN STORY
The Federal Government of Nigeria has secured a major legal victory against international technology contractor European Dynamics UK Ltd. The dispute, which was mediated at the International Centre for Arbitration and Mediation in Abuja, arose from a national e-Procurement project managed by the Bureau of Public Procurement (BPP). The contractor had sought approximately $2.4 million for alleged milestones, $3 million in general damages, and $800,000 in settlement claims. However, the tribunal dismissed these claims in their entirety, relieving Nigeria of the multi-billion naira liability.
The core of the dispute involved the User Acceptance Test (UAT) for the eGP system. The BPP, under Director-General Dr. Adebowale Adedokun, identified critical functional deficiencies and errors during testing. The Bureau argued that in software customization, delivery is only valid upon a satisfactory UAT that confirms the system meets statutory workflows and technical requirements. The tribunal agreed, ruling that as the technical expert, the contractor was obligated to remedy these deficiencies at no additional cost to Nigeria.
Furthermore, the tribunal found no evidence that the BPP had consented to merging multi-phase modules into a single phase for payment purposes. Dr. Adedokun noted that while this vendor had previously won cases against various African nations, Nigeria stood its ground using local legal expertise. Attorney-General of the Federation, Lateef Fagbemi, SAN, hailed the win as a signal to the international community that Nigeria is committed to protecting its resources and will no longer tolerate “business as usual” in public sector contracting.
WHAT’S BEING SAID
- “This particular vendor has taken various African countries to court and won every single case. Nigeria is the first to defeat them,” stated BPP Director-General Dr. Adebowale Adedokun.
- “This win sends a clear message… Nigeria has resonated. It is no longer business as usual,” said Attorney-General Lateef Fagbemi, SAN.
- The tribunal held that the contractor bore the obligation to ensure the system complied with contractual requirements “irrespective of earlier technical documents that might have been approved”.
WHAT’S NEXT
- Lessons from this arbitration will be incorporated into ongoing e-procurement reforms to strengthen contract performance oversight.
- The BPP will continue the development of the eGP system, ensuring that future payments are tied strictly to “demonstrable value delivered.”
- Legal experts recommend tighter scrutiny of User Acceptance Test (UAT) clauses in all future federal technology contracts to reduce the risk of similar disputes.
BOTTOM LINE
The Bottom Line is that Nigeria’s victory underscores the importance of rigorous technical validation and local legal brilliance in international contracting. By refusing an out-of-court settlement and insisting on performance-based payments, the BPP has set a new precedent for African nations in dealing with global technology vendors.
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