The Federal Government has secured a significant victory in its protracted international arbitration dispute with Sunrise Power and Transmission Company Limited over the Mambilla Hydroelectric Power Project in Taraba State.
An International Arbitration Tribunal constituted under the International Chamber of Commerce (ICC) in Paris ruled in Nigeria’s favour, dismissing claims that could have exposed the country to more than $3.38bn in settlement payments, compensation and interest.
President Bola Tinubu announced the development in a statement by the State House on Thursday, saying the decision had removed a major legal obstacle to the proposed 1,500MW hydropower project.
“Today’s ICC ruling clears the single biggest legal hurdle that has paralysed the Mambilla hydro power project for years,” the President said.
The dispute originated from a 2003 agreement involving Sunrise and the Federal Government for the development of a 3,050MW hydroelectric plant under a build-operate-transfer arrangement.
Sunrise commenced arbitration proceedings against Nigeria on October 10, 2017, alleging that the government had breached its contractual obligations.
According to the Presidency, the company sought $680m in settlement and interest in the latest proceedings, while a separate but related claim involved more than $2.7bn in compensation and interest.
Together, the claims placed Nigeria’s potential exposure at more than $3.38bn.
The tribunal delivered its final award on September 17, 2026, bringing nearly nine years of arbitration proceedings to a close.
Tribunal dismisses key claims
The three-member tribunal rejected Sunrise’s request for a declaration that Nigeria had breached its obligations under a settlement agreement and an addendum executed by the parties.
It also dismissed the company’s demand for $400m, comprising a $200m settlement sum and another $200m claimed as a default payment.
The tribunal further ruled that Leno Adesanya, promoter of Sunrise Power, was bound by the arbitration agreement contained in the settlement agreement and addendum.
It consequently affirmed its jurisdiction over Nigeria’s counterclaim against both Sunrise and Adesanya.
As part of the award, Sunrise and Adesanya were directed to reimburse Nigeria for 75 per cent of its legal fees and expenses incurred during the proceedings.
Nigeria’s legal expenses were assessed at $11.82m. Of this amount, $2.5m is expected to come from funds held in escrow by the ICC, while the claimants are to pay the outstanding $9.32m.
The outstanding sum will attract interest at 10 per cent per annum, compounded annually, from the date the final award was notified until full payment.
The tribunal also fixed arbitration costs at $1.66m, with Sunrise and Adesanya responsible for 75 per cent and Nigeria for the remaining 25 per cent.
Melaine van Leeuwen chaired the tribunal, with Stavros Brekoulakis and Simon Nesbitt serving as co-arbitrators.
Nigeria’s legal representation was led by Elizabeth Oger-Gross and Tolu Obamuroh of Paul Hastings LLP.
President praises Buhari, Obasanjo
Tinubu commended Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, officials of the Federal Ministry of Justice and Nigeria’s legal team for their handling of the arbitration.
He also praised former President Olusegun Obasanjo and the late former President Muhammadu Buhari for testifying in Nigeria’s defence.
According to Tinubu, the dispute stemmed from the 2003 contract for the construction of the 3,050MW project, which he said had not been authorised by the Federal Executive Council.
“I commend the patriotism and support of former President Olusegun Obasanjo, GCFR, and late President Muhammadu Buhari, GCFR, who testified in the case,” he said.
The President also acknowledged the roles played by former Power Ministers Babatunde Fashola and Suleiman Adamu, as well as other witnesses and technical experts.
He commended the National Security Adviser for supporting the government’s case and the Economic and Financial Crimes Commission for investigating aspects of the dispute.
Tinubu said Nigeria would remain open to legitimate investors while resisting claims it considers unjustified.
“I want to assure you that while our country remains committed to partnering with genuine investors and honouring its legal obligations, it will continue to defend all opportunistic claims instituted against our commonwealth strongly,” he said.
Project scaled down
The Mambilla project was originally conceived as a 3,050MW hydropower scheme, but its proposed capacity has since been reduced as the government sought to improve its financial viability.
In February 2021, then Minister of Power Saleh Mamman announced that the planned capacity had been reduced by about 50 per cent to approximately 1,525MW.
The reduction was expected to cut the project cost by about $1bn.
By July of the same year, Mamman told the Senate Committee on Power that the project had been further rescoped to about 1,500MW to make it “bankable” and acceptable to lenders.
The original project was estimated to cost between $5bn and $5.8bn, while the revised scheme was put at about $4bn.
Attempts to resolve the dispute through a settlement agreement in 2020 subsequently broke down over disagreements concerning its implementation, leading to further arbitration.
The project has remained stalled for years, with legal disputes, financing difficulties and changes to its implementation framework contributing to repeated delays.
Power investment remains a challenge
The latest development comes amid renewed concerns over Nigeria’s failure to attract sufficient investment into large-scale electricity generation projects.
Former Minister of Power, Prof. Barth Nnaji, recently said Nigeria had gone 11 years without financing a new major power plant.
Speaking at the 2026 conference of the Nigerian Association for Energy Economics in Lagos, Nnaji attributed the situation to policy inconsistency, inadequate infrastructure and the discontinuation of a government-backed financing mechanism that he said had helped attract international capital into the sector.
He also identified financing bottlenecks as a major obstacle to the development of strategic energy projects, including Mambilla.
With the arbitration dispute now settled in Nigeria’s favour, attention is expected to shift to the financing and implementation of the rescoped project, which remains one of the country’s major proposed additions to electricity generation capacity.
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