P&ID Case: Nigeria Demands UN Reform Of Investor-State Arbitration Laws

Nigeria has called on the United Nations to reform the international investment arbitration system to prevent investor-state disputes from undermining national sovereignty and public interest.

Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), made the demand on Thursday at the Heads of Delegations Roundtable of the Chief Legal Advisors Forum (CLAF) 2026 in Singapore.

Fagbemi said Nigeria’s experience in the controversial Process and Industrial Developments Limited (P&ID) arbitration case demonstrated the potential consequences of an international dispute settlement system that fails to adequately protect states.

According to him, the P&ID case could have crippled Nigeria’s economy after damages running into billions of dollars were calculated using compound interest.

The minister said Nigeria was therefore advocating reforms to the Investor-State Dispute Settlement (ISDS) system that would strengthen, rather than bypass, domestic courts.

“States consistently express concern about the opacity of arbitral proceedings and the unpredictability of awards. Nigeria continues to support reforms that enhance transparency of proceedings, consistency in arbitral reasoning, and predictability in outcomes,” Fagbemi said.

He added that Nigeria had become a strong proponent of clearer rules for calculating damages following its experience in the P&ID case.

“The current position largely relies on the whims of each arbitrator or tribunal. For example, in the notorious case of P&ID, damages were calculated on the basis of compound interest, which would have had a crippling effect to the tune of billions of dollars,” he said.

Fagbemi said the Federal Government had taken steps to strengthen Nigeria’s investment dispute framework, including constituting a committee of experts to review the country’s bilateral investment treaties and commitments under multilateral treaties and conventions.

He also noted that Nigeria had reformed its Arbitration Act to promote greater transparency in arbitration proceedings.

The AGF said reforms to ISDS had become necessary to address structural imbalances in the international investment regime and ensure greater fairness between capital-importing and capital-exporting countries.

“Nigeria sees this consensus as a positive development: it signals that the global community understands the need for recalibration to ensure fairness, predictability, and development alignment,” he said.

According to him, Nigeria supports systemic reforms including clearer treaty standards, improved procedural safeguards, stronger accountability mechanisms and a more balanced distribution of rights and obligations between investors and states.

Fagbemi also called for greater emphasis on strengthening national judicial institutions, arguing that stronger domestic courts would reduce countries’ dependence on external arbitration.

“Strengthening national judicial institutions is central to building long-term rule-of-law capacity and reducing over-reliance on external arbitration,” he said.

The minister further urged the integration of public interest considerations into investment dispute settlement, saying arbitration frameworks must take into account climate action, environmental protection, human rights, community welfare and sustainable development.

He said Nigeria’s 2016 Model Bilateral Investment Treaty, which is currently under review after a decade, reflects the country’s position that investment protection must not prevent governments from regulating in the public interest.

Fagbemi said Nigeria believed that investment arbitration reforms required collective action by states, stressing that the system must balance the interests of both investors and host countries.

“The challenges are shared, solutions must be collective, and reform must balance the needs of capital-importing and capital-exporting countries,” he said.

The CLAF 2026 roundtable was convened by Singapore’s Ministry of Law.