FG Wins N4bn, €185m Arbitration Battle Over Ajaokuta Contract

The Federal Government has recorded a victory after a tribunal sitting under the Alternative Dispute Resolution (ADR) Centre of the Federal High Court dismissed a multibillion-naira and multimillion-euro claim against Nigeria in relation to the Ajaokuta Steel project.

This was disclosed in a statement released on Thursday by Kamarudeen Ogundele, Special Assistant to the President (Communication and Publicity) at the Office of the Attorney-General of the Federation (AGF).

The AGF, Prince Lateef Fagbemi, a Senior Advocate of Nigeria, confirmed that the final arbitral award, delivered on November 11, 2025, dismissed claims brought by Fougerolle V Fougerolle, a joint venture contractor engaged for civil works at the Ajaokuta Iron and Steel Complex.

The company had sought additional payments totalling N3.84bn and €185.7m, nearly 18 years after terminating the contract on January 30, 2004.

The contract was originally signed on March 31, 1981, between the Federal Government and the joint venture comprising Fougerolle Nigeria Ltd and Fougerolle SA of France.

After the contract termination, the Federal Government engaged PriceWaterhouseCoopers to verify any outstanding financial obligations, following which Fougerolle was paid N3.89bn through FGN Bonds on September 11, 2006.

The contractor subsequently signed an indemnity on September 8, 2006, confirming the payment as full and final settlement.

However, more than 16 years later, the company initiated arbitration proceedings via a notice dated December 12, 2022, demanding fresh compensation despite having earlier discharged the settlement agreement.

The Tribunal upheld the Federal Government’s preliminary objections, ruling that the claims were statute-barred, lacked a reasonable cause of action, and were extinguished by the indemnity agreement.

It further held that Fougerolle failed to prove its case on the merits and had waived any additional right to compensation.

The Tribunal also dismissed Fougerolle’s allegations of expropriation and rejected its claim that the indemnity was signed under duress.

With the dismissal, Nigeria has avoided potential liabilities exceeding N4bn.

Fagbemi praised legal officers of the Federal Ministry of Justice who defended the case in-house, noting that the victory underscores the administration’s commitment to protecting national interests and combating predatory claims against the country.

He also reaffirmed the government’s support for ADR as a credible dispute resolution method.