Nigeria Defeats European Tech Giant in $6.2m Arbitration over e-Procurement Project

In a landmark legal victory for the President Bola Ahmed Tinubu administration, Nigeria has successfully fended off a $6.2 million (approx. ₦9.3 billion) claim brought by an international technology contractor, European Dynamics UK Ltd.

The ruling, which is final and not subject to appeal, saw an international arbitration tribunal dismiss the contractor’s claims in their entirety.

The dispute centered on a stalled national e-Procurement system project managed by the Bureau of Public Procurement (BPP).

The Dispute: Milestone Claims vs. Functional Reality

The conflict arose from a contract for the design, installation, and maintenance of an electronic Government Procurement (eGP) system, a World Bank-financed project intended to digitize federal procurement for better transparency.

European Dynamics UK Ltd had dragged the BPP to arbitration, demanding:

• $2.4 million for alleged milestone completions.
• $3 million in general damages.
• $800,000 in additional settlement claims.

The Turning Point:

Upon assuming office, Dr. Adebowale Adedokun, the director-general of the BPP, inherited the case along with ongoing out-of-court settlement talks.

However, the Bureau elected to proceed with the arbitration, insisting that government payments must be tied strictly to demonstrable value delivered.

The UAT Defense: Why Software isn’t a Physical Supply

A central pillar of Nigeria’s defense, led by the Nigerian law firm Johnson & Wilner LLP, was the failure of the User Acceptance Test (UAT).

The BPP argued that unlike physical goods, software delivery only crystallizes when a system meets technical and statutory requirements in its live environment. The tribunal upheld this position, noting several critical functional deficiencies:

• Performance Errors: The UAT identified critical omissions that the vendor was responsible for fixing at no extra cost.
• Contract Distortion: The contractor attempted to merge multi-phase modules into a single phase to trigger payment. The tribunal ruled this distorted the contractual framework.
• Expert Responsibility: As the technical expert, the contractor bore the burden of ensuring compliance, regardless of any earlier technical documents approved by the BPP.

No Longer Business as Usual – AGF Fagbemi

Presenting the award to the Attorney General of the Federation (AGF), Prince Lateef Fagbemi (SAN), Dr. Adedokun highlighted that the vendor had previously defeated several other African nations in similar cases.

“Nigeria is the first to defeat them. We stood our ground against one of the best legal teams in the world because we believed in the expertise of our own Nigerian legal professionals,” Adedokun stated.

The AGF hailed the victory as a signal of institutional strengthening under the current administration.

“This win sends a clear message: Nigeria has resonated. It is no longer business as usual,” Fagbemi said, adding that the victory would instill courage in other African nations to protect their resources.

This victory is a significant win for Nigeria’s treasury, protecting ₦9.3 billion that would have otherwise been lost to a failed technology project.

Beyond the cash, the ruling sets a vital precedent for Public Sector Technology Contracting:

• UAT is King: Government agencies must ensure rigorous User Acceptance Testing before signing off on milestones.
• Local Expertise: The use of a specialized Nigerian firm, Johnson & Wilner LLP to defeat an international giant underscores the capacity of local legal professionals in complex tech litigation.
• End of “Pay-for-Effort”: The ruling reinforces that in software customisation, delivery is measured by functionality, not just physical handover or milestone documents.

The post Nigeria Defeats European Tech Giant in $6.2m Arbitration over e-Procurement Project appeared first on Tech | Business | Economy.