European Tech Giant Loses $6.2m International Arbitration Suit Against Nig

In another milestone victory by the administration of President Bola Ahmed Tinubu, Nigeria, the Bureau of Public Procurement (BPP), has yet again won a complex international arbitration.

European Dynamics UK Ltd, an international technology contractor, had entered into a dispute with the bureau over a national e-Procurement project.

In the ruling which is final and not subject to appeal, the tribunal dismissed the contractor’s claims in their entirety, relieving Nigeria of potential financial exposure estimated at over $6.2 million (approximately ₦9.3 billion) in claimed payments and damages.

Nigeria’s legal team was led by Johnson & Wilner LLP, a Nigerian business and technology law firm, with Basil Udotai Esq., Founding Partner, leading the arbitration together with the firm’s strategic partners and associates.

Upon assuming office, the Director-General of the BPP, Dr Adebowale Adedokun, inherited a stalled technology project together with ongoing arbitration proceedings, in which European Dynamics UK Ltd had claimed approximately $2.4 million for alleged milestone completions, $3 million in general damages and an additional $800,000 settlement claims.

Prior to Dr Adedokun’s appointment, there had been discussions around an out-of-court settlement and the Bureau, however, elected to continue with the arbitral process, 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.

The underlying contract concerned the design, development/customisation, supply, installation and maintenance of a national electronic Government Procurement (eGP) system financed with support from the World Bank, project aimed to strengthen transparency, accountability and efficiency across federal public procurement processes.

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.

That delivery crystallizes only upon satisfactory UAT confirming that the system operates in accordance with the technical requirements, statutory workflows, and operational environment for which it was commissioned.

The tribunal accepted Nigeria’s position that these deficiencies fell within the vendor’s responsibility to remedy at no additional cost and further held that the contractor, as the technical expert, bore the obligation to ensure that the delivered system complied with contractual requirements irrespective of earlier technical documents that might have been approved by the BPP.

The tribunal also found no evidence that the Bureau consented to the merger of multi-phase modules into a single phase stressing that nothing in the Contract suggests that such a merger is permissible, particularly given that payment is structured in phases

Consequently, the arbitrator dismissed all claims by European Dynamics UK Ltd in their entirety.

Dr Adedokun, during a formal presentation of the award to the Attorney -General of the Federation and Minister of Justice, Prince Lateef Fagbemi, (SAN), described the outcome as an important signal for public sector technology contracting adding that this particular vendor has taken various African countries to court.”

PR/Garry Ochigbo