Nigeria has secured a significant victory in an international arbitration dispute with European Dynamics UK Ltd, with a tribunal dismissing claims worth over $6.2 million against the country.
The case arose from a contractual dispute between the Bureau of Public Procurement (BPP) and the UK-based technology contractor over the development of a national electronic Government Procurement (eGP) system supported by the World Bank. The contractor had sought approximately $2.4 million for alleged milestone completions, $3 million in general damages and an additional $800,000 in settlement claims.
In a final ruling not subject to appeal, the arbitral tribunal dismissed all claims in their entirety, relieving Nigeria of potential financial liability estimated at about ₦9.3 billion.
Nigeria’s legal team was led by Johnson & Wilner LLP, with founding partner Basil Udotai spearheading the arbitration proceedings alongside the firm’s associates and strategic partners.
At the heart of the dispute was the User Acceptance Test (UAT) conducted by the BPP, which identified significant functional deficiencies in the e-procurement system, including omissions and performance-related errors.
The bureau maintained that in software customisation contracts, delivery is only deemed complete upon successful performance validation, not merely physical handover. The tribunal upheld this position, ruling that the deficiencies identified during the UAT fell within the contractor’s obligation to remedy at no additional cost.
The panel also rejected the contractor’s position regarding the merger of multi-phase modules into a single phase, holding that the contract did not permit such restructuring, particularly as payments were structured in phases.
Director-General of the BPP, Dr Adebowale Adedokun, described the outcome as a landmark decision for public sector technology contracting. He noted that European Dynamics had previously prevailed in arbitration cases against several African countries, making Nigeria the first to defeat the firm in such proceedings.
Presenting the award to the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, Adedokun expressed appreciation for the federal government’s support in pursuing the arbitration instead of opting for an out-of-court settlement.
Responding, Fagbemi commended the BPP leadership and the legal team, stating that the ruling sends a clear signal that Nigeria will firmly defend its contractual and financial interests. He added that the outcome demonstrates the country’s resolve to strengthen institutions and ensure accountability in public sector transactions.
The ruling underscores the importance of clearly defined milestones, rigorous User Acceptance Testing and strict adherence to contractual performance standards in government technology projects.
Officials say lessons from the arbitration will be integrated into ongoing e-procurement reforms to improve oversight, strengthen contract management frameworks and reduce the risk of future disputes in Nigeria’s public procurement system.
