The Federal Government of Nigeria has secured a major legal victory in the long-running Ajaokuta steel arbitration dispute, saving over N4 billion in potential liabilities after an arbitration tribunal dismissed a substantial claim filed by contractors involved in a 1981 civil works agreement.
The dispute centred on a contract awarded to Fougerolle Nigeria Ltd and the French company Fougourolle SA for work at the Ajaokuta Iron and Steel Complex, a development now under renewed national attention due to the scale of the Ajaokuta steel arbitration claim.
Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), confirmed that the tribunal delivered its final award on November 11. He explained that the contractors initiated the Ajaokuta steel arbitration proceedings on December 12, 2022—nearly 18 years after terminating the contract in 2004.
According to Fagbemi, the claimant sought to compel Nigeria to pay more than N3.8 billion and €185.7 million through the Ajaokuta steel arbitration, amounts which the government argued were neither certified nor contractually justified. “Contrary to the contract terms and its prior undertakings, Fougerolle petitioned the tribunal for additional unverified sums,” he stated.
ALSO READ
The Federal Government had earlier commissioned PricewaterhouseCoopers to verify any outstanding obligations arising from the contract. This assessment led to a payment of N3.89 billion in 2006 through FGN Bonds, which the company accepted as full and final settlement—an important factor in the Ajaokuta steel arbitration ruling.
Despite this settlement, Fougerolle revived its claim 16 years later. However, the tribunal ruled that the Ajaokuta steel arbitration case was statute-barred, lacked a valid cause of action and had already been extinguished through the indemnity signed in 2006.
Even when considered on the merits, the tribunal found that Fougerolle failed to substantiate its allegations. It also rejected claims of expropriation and assertions that the indemnity agreement was signed under duress—further strengthening Nigeria’s position in the Ajaokuta steel arbitration.
The judgment marks a significant achievement for the Ministry of Justice. Fagbemi said the successful defence of the Ajaokuta steel arbitration demonstrates the government’s strengthened capacity to manage sensitive litigation and “resist predatory and opportunistic claims against Nigeria.”
