The Federal Government has secured a major legal victory in a 43-year-old dispute over the controversial Ajaokuta Iron and Steel civil works contract, after an arbitration tribunal dismissed a fresh multi-billion-naira claim filed by French construction firm, Fougerolle SA and its Nigerian affiliate, Fougerolle Nigeria Ltd.
Attorney-General of the Federation and Minister of Justice, Prince Lateef Fagbemi, SAN, announced the victory on Friday, describing it as a decisive blow against “predatory and opportunistic claims” targeting Nigeria’s finances.
Fagbemi said the tribunal—sitting under the Alternative Dispute Resolution Centre of the Federal High Court—delivered its final award on November 11, dismissing the contractors’ attempt to compel Nigeria to pay N3.8bn and €185.7m in additional compensation.
“This decision reaffirms the government’s resolve to defend the nation against inflated and baseless claims,” Fagbemi said in a statement signed by his media aide, Kamarudeen Ogundele.
The disputed contract dates back to 1981, when the joint venture was awarded civil works construction in the Ajaokuta Steel Complex, then under the old Kwara State.
The firm terminated the contract on January 30, 2004, and was subsequently paid N3.89bn through Federal Government bonds in September 2006—an amount verified by PricewaterhouseCoopers as full and final settlement. The company also signed an indemnity relinquishing further claims.
However, 16 years later, in December 2022, Fougerolle returned with a fresh Notice of Arbitration seeking additional payments that government lawyers described as “unverified, uncertified and legally untenable.”
The tribunal, according to Fagbemi, upheld the Federal Government’s preliminary objections, ruling that the claim was: statute-barred, unsupported by a reasonable cause of action, extinguished by the indemnity and FGN bond settlement, and filed by an incompetent claimant.
It further held that even on merit, the company failed to prove any outstanding entitlement.
“Fougerolle waived all rights to any further claim when it accepted the bond payment in 2006,” the tribunal ruled, rejecting arguments that the indemnity was signed under duress.
Fagbemi praised lawyers from the Federal Ministry of Justice who represented Nigeria, saying the outcome demonstrates the ministry’s strengthened capacity to defend high-stake litigation without outsourcing.
“With this tribunal award, the Federal Government has avoided over N4bn in liabilities,” he said.
He added that the ruling aligns with the Tinubu administration’s policy of encouraging Alternative Dispute Resolution while resisting all frivolous financial claims against the country.
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