FG Wins N4billion , €185,733,496 In Arbitration

FG Wins N4 Billion, €185,733,496 in Arbitration

On November 11, 2025, the Federal Government of Nigeria secured a landmark victory in a long-standing arbitration case against Fougerolle Nigeria Ltd and its French partner, Fougerolle SA.

The Tribunal, constituted under the auspices of the Alternative Dispute Resolution Centre of the Federal High Court, delivered a final arbitral award dismissing claims brought forward by the contractors, thereby saving Nigeria from liabilities exceeding N4 billion and €185,733,496.

The dispute traces back to a contract signed on March 31, 1981, between the Federal Republic of Nigeria and the Fougerolle joint venture for civil works at the Ajaokuta Iron and Steel Complex in present-day Kogi State.

The contract was terminated by the claimant on January 30, 2004, yet Fougerolle initiated arbitration nearly 18 years later, in December 2022. The contractors sought additional payments of unverified sums amounting to N3 billion and €185 million, despite having previously accepted a settlement.

In 2006, following the termination of the contract, the Federal Government engaged PricewaterhouseCoopers to verify any outstanding debts. This led to the issuance of N3 billion in FGN Bonds to Fougerolle on September 11, 2006.

Crucially, the company signed an indemnity on September 8, 2006, acknowledging the payment as full and final settlement of all claims. Despite this, Fougerolle attempted to reopen the matter more than a decade later, alleging duress and expropriation.

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

It further emphasized that the payment made via FGN Bonds discharged Nigeria’s contractual obligations, leaving Fougerolle with no legal grounds for further claims. The Tribunal rejected the allegations of duress and dismissed the expropriation claims, concluding that Fougerolle had waived all rights to pursue additional compensation.

This ruling represents a significant legal and financial triumph for Nigeria. By dismissing the claims, the Tribunal not only protected the nation’s treasury from unwarranted liabilities but also reinforced the sanctity of contractual settlements and indemnities. The Attorney-General of the Federation and Minister of Justice, Prince Lateef Fagbemi (SAN), expressed satisfaction with the outcome, highlighting the government’s commitment to defending Nigeria’s interests in international and domestic arbitration.

The case underscores the importance of due diligence in contract management and the necessity of safeguarding national assets against protracted disputes. It also serves as a precedent in affirming that settlements, once agreed upon and indemnified, cannot be revisited decades later under unfounded claims.

The Federal Government’s victory in this arbitration not only saved billions in potential liabilities but also reaffirmed Nigeria’s resolve to uphold the rule of law and protect its economic interests in complex contractual disputes.