Nigeria Wins European Tech Giant In $6.2m Arbitration

Nigeria through the Bureau of Public Procurement (BPP) has emerged victorious in a $6.2m international arbitration dispute against European Dynamics UK Ltd, making it the first African nation to defeat the European technology firm in such proceedings.

The Director-General of the BPP, Dr Adebowale Adedokun noted that “This particular vendor has taken various African countries to court and won every single case. 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.”

This was disclosed in press release on Sunday from the Office of the Attorney General of the Federation and Minister of Justice through the Special Adviser to the President on Communication and Publicity Kamarudeen Ogundele, anipr.

According to the release, the dispute stemmed from a contract covering the design, development, customisation, supply, installation and maintenance of a national electronic Government Procurement (eGP).

This system is intended to enhance transparency, accountability and efficiency across federal procurement processes with the project being financed with support from the World Bank.

Central to the dispute was the User Acceptance Test (UAT). The UAT carried out by the BPP identified significant functional deficiencies, including critical omissions and errors affecting system performance.

The bureau argued that unlike conventional supply contracts where delivery may occur upon physical handover, software customisation projects are performance-validated.

But European Dynamics had claimed approximately $2.4m for alleged milestone completions, $3m in general damages and an additional $800,000 in settlement claims.

In total, Nigeria faced a potential exposure of over $6.2m, estimated at about N9.3bn in payments and damages

However, In a ruling described as final and not subject to appeal, the sole arbitrator, Mrs Funmi Roberts, dismissed all claims in their entirety.

The tribunal upheld Nigeria’s position that delivery under a software customisation contract crystallises only after a satisfactory User Acceptance Test (UAT) confirms compliance with technical requirements, statutory workflows and the operational environment for which the system was commissioned.

Subsequently, the tribunal agreed that the deficiencies fell within the vendor’s responsibility to remedy at no additional cost and held that the contractor, as the technical expert, bore the obligation to ensure that the system complied with contractual requirements irrespective of earlier technical documents that might have been approved by the Bureau.

On the issue of merging multi-phase modules into a single phase, the tribunal found no evidence that the Bureau consented to such restructuring.

“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,” it ruled.

In a disclosure by Adedokun, he noted that he inherited both the stalled technology project and the ongoing arbitration upon assumption of office, noting that prior discussions had considered an out-of-court settlement.

However, the Bureau elected to proceed with arbitration maintaining that payments must be tied strictly to demonstrable value delivered.

That led to the engagement of the specialised Nigerian legal team with expertise in technology contracting to review the technical and contractual issues in dispute.

He commended the Attorney General for authorising the continuation of the arbitral proceedings, stressing that without such support, Nigeria would have lost billions of naira that can now be channelled to critical national development.

Responding during the formal presentation of the award, the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, commended Adedokun’s courage and the brilliance of the legal team.

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

Fagbemi also commended President Bola Tinubu for supporting institutional strengthening within the justice sector.

“We have a leader, mentor and father that can always watch our back. If he says leave it, we have no choice. He wants to nurture strong institutions,” he said.

THE WHISTLER reports that the Nigerian legal team was led by Johnson & Wilner LLP, a business and technology law firm, with Basil Udotai Esq., founding partner of the firm, leading the arbitration alongside strategic partners and associates.

They encouraged the incorporation of lessons from the arbitration into ongoing e-procurement reforms to strengthen contract performance oversight and reduce the risk of future disputes.

According to them, the ruling underscores the importance of rigorous User Acceptance Testing, clearly defined milestone structures and expert-driven oversight in government technology projects.