US arbitration tribunal frees Nigeria of $1.5bn liability

….orders two oil firms to refund $660, 000 to FG

United States of America-based International Centre for Settlement of Investment Dispute has relieved Nigeria of a $1.5bn liability in connection with a contract agreement involving two oil firms, Interocean Development Company and Interocean Oil Exploration Company.

Attorney-General of the Federation and Minister of Justice, Mr Abubakar Malami (SAN), disclosed this in a statement on Wednesday.

Spokesperson to the AGF, Dr Umar Gwandu, in the statement issued on behalf of his boss, stated that the tribunal headed by Prof. William Park, had in its decision delivered earlier on Tuesday ruled that Nigeria did not breach any of its obligations in the contract.

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It added that the tribunal ordered the two oil firms, Interocean Development Company and Interocean Oil Exploration Company, to reimburse the Federal Government of Nigeria the share of the arbitration costs incurred in the proceedings totalling $660,129.87.

Malami’s statement partly read, “The oil companies that have among its legal team, Mr. Olasupo Shasore, SAN requested, among others, relief from the Tribunal directing the Federal Government of Nigeria, its relevant privies and instrumentalities to pay aggravated damages in an amount to be proven during these arbitral proceedings which the Claimants estimate at being in excess of US$ 1.5 billion (One Billion Five hundred Million United States Dollars).”

The statement quoted part of the judgement as reading, “The Tribunal finds no liability on the part of Respondent in connection with Claimants’ loss of control over their investment, Pan Ocean”.

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The AGF, in his reaction to the judgment, described it as “an addition to the multiple success stories recorded in international litigations by the Federal Ministry of Justice.”

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