Victoria Ikenne
The promoter of Sunrise Power and Transmission Company Limited, Leno Adesanya, has acknowledged transferring $500,000 to Jennifer Douglas, the former wife of ex-Vice President Atiku Abubakar, during negotiations surrounding the controversial Mambilla Hydropower Project in 2003.
Adesanya told a three-member International Chamber of Commerce arbitration tribunal that the payment, made on January 30, 2003, was a legitimate foreign-exchange transaction carried out for Atiku.
However, the tribunal rejected the explanation, saying Adesanya failed to produce sufficient documentary evidence to establish that the transaction was a foreign-exchange deal for the former vice-president.
The findings are contained in the final award of the ICC tribunal in the arbitration between Sunrise Power and the Federal Republic of Nigeria.
The tribunal ultimately dismissed Sunrise’s claims against Nigeria and ordered Sunrise and Adesanya to bear 75 per cent of Nigeria’s legal costs and expenses.
According to the award, the $500,000 was transferred through China Castle Investments Limited, an offshore company controlled by Adesanya, into Douglas’s Citibank account in the United States.
The payment occurred approximately two weeks after Sunrise submitted its tender for the Mambilla project to a multi-agency technical committee of the Federal Government.
‘I transferred $500,000’
In his evidence before the tribunal, Adesanya confirmed that he made the payment.
“I confirm that I made a transfer of $500,000 to the Abubakar through my company China Castle Investments Ltd in early 2003,” he said in a witness statement cited in the tribunal’s award.
Under cross-examination, he also acknowledged that the money was transferred to Douglas.
Adesanya’s explanation was that he had operated a bureau de change business through Moneyline Ventures Limited and that the dollars represented foreign currency purchased for Atiku with naira.
But the tribunal said the explanation was not supported by the documentation it expected to see.
It noted that Adesanya did not produce evidence of the alleged naira payment, the exchange rate used, instructions from Atiku or his representatives, correspondence relating to the transaction or documentation showing its commercial purpose.
Adesanya reportedly told the tribunal that the discussions surrounding the transaction were oral and that, more than two decades later, he no longer had access to written communications that might have existed.
Neither Atiku nor Douglas testified in the arbitration.
The tribunal also noted that Sunrise and Adesanya did not present a witness statement or declaration from either of them to corroborate the foreign-exchange explanation.
The tribunal also examined Adesanya’s account of how he allegedly obtained confirmation that the money was meant for Atiku.
Adesanya initially suggested that Atiku, through his lawyers, had confirmed the transaction as a foreign-exchange arrangement.
During cross-examination, however, he said the explanation had been communicated to him by a person identified as “Dr Ndukwe,” whom he described as Atiku’s medical doctor, while a subsequent confirmation allegedly came through lawyers.
When pressed on whether the information had actually originated from Atiku, Adesanya described that position as his “logical assumption.”
He said he did not believe Atiku’s
Adesanya also gave an explanation for why Douglas did not appear as a witness.
He told the tribunal that Douglas and Atiku had experienced a difficult divorce and that she had fallen out with him.
“She would not even pick my call,” Adesanya was quoted as saying.
The tribunal, however, noted an inconsistency between that evidence and an earlier witness statement in which Adesanya described himself as still being friends with Douglas.
He had also described her as a close friend and his first girlfriend in secondary school.
The tribunal further considered a 2010 report by the United States Senate Permanent Subcommittee on Investigations concerning offshore transfers into Douglas’s US accounts.
According to the tribunal’s account of the report, Douglas had told banks questioning the transactions that the funds came from her husband and said she had limited knowledge of the offshore companies through which the money was transferred.
The tribunal ultimately concluded that the lack of corroborating evidence and inconsistencies in Adesanya’s evidence prevented it from accepting his explanation that the $500,000 represented a foreign-exchange transaction for Atiku.
China Castle had no forex licence
The tribunal also questioned the legality of the alleged foreign-exchange transaction.
Adesanya was unable to establish that Moneyline Ventures Limited possessed a bureau de change licence at the relevant time.
Although he reportedly offered to obtain the licence through his company secretary, no licence was subsequently submitted to the tribunal.
More significantly, the tribunal noted that the money was transferred through China Castle Investments Limited rather than Moneyline.
Adesanya acknowledged under cross-examination that China Castle was not licensed to conduct foreign-exchange transactions and that such activities were outside the company’s stated corporate purposes.
Payment came amid Mambilla negotiations
The tribunal examined the $500,000 transfer against the chronology of the Mambilla project negotiations.
Sunrise and North China Power Engineering Company had expressed interest in participating in the project in September 2001.
Sunrise was subsequently incorporated in Nigeria on October 9, 2001, with Adesanya, his wife and Lenoil Holdings Limited among its initial shareholders.
On October 18, 2001, Sunrise wrote to then President Olusegun Obasanjo and Atiku, who was vice-president at the time, informing them of its interest in developing Mambilla with its Chinese partner.
Atiku and his team subsequently met representatives of Sunrise and the Chinese company.
Minutes cited by the tribunal showed that the project was then estimated at about $6bn.
In July 2002, Atiku led a Nigerian government delegation to China that included officials of the Ministry of Power and Steel and Adesanya.
During the trip, Nigerian officials and Chinese companies signed a memorandum of understanding covering several power projects, including the first phase of Mambilla.
By January 2003, Sunrise was participating in the process for the proposed project.
The company presented its tender to a multi-agency technical committee around January 15 or 16, 2003.
About two weeks later, on January 30, China Castle transferred the $500,000 to Douglas’s US bank account.
On March 12, 2003, the technical committee recommended Sunrise for the proposed 3,960-megawatt project.
The committee said seven international construction companies had expressed interest, while four submitted detailed proposals.
Sunrise was recommended after an assessment of the proposals and presentations, with the committee citing cost effectiveness, capacity to execute the project and its economic implications.
The company had proposed a tariff of 2.1 US cents per kilowatt-hour under a 40-year build-operate-transfer arrangement.
In April 2003, then Power and Steel Minister, Olu Agunloye, sought presidential approval to issue Sunrise a letter of comfort, commence negotiations on the concession and financing arrangements and determine how the Federal Government’s proposed 25 per cent equity participation would be funded.
Obasanjo subsequently directed that the matter be taken to the Federal Executive Council.
The proposal came before the council on May 21, 2003.
What happened at that meeting later became one of the major disputes in the arbitration.
Obasanjo maintained that the council did not approve the contract and that he directed the withdrawal of the memorandum.
Sunrise, however, relied on a May 22, 2003 letter signed by Agunloye as evidence that it had been awarded the project under a build-operate-transfer arrangement.
That letter subsequently formed the basis of Sunrise’s multibillion-dollar claims against Nigeria.
The tribunal also examined Atiku’s role and influence during the period.
Sunrise and Adesanya had argued that Atiku did not possess sufficient political influence to affect the purported May 2003 award.
It noted Atiku’s involvement in the Mambilla discussions from at least 2001, including his meeting with Sunrise and its Chinese partner and his leadership of the Nigerian delegation to China in 2002.
The tribunal also referred to a February 2003 US diplomatic cable which described Adesanya as an “Atiku insider” and an associate of the then vice-president.
The cable reportedly contained an account of comments attributed to Adesanya concerning Atiku’s political influence during negotiations over the Obasanjo-Atiku re-election ticket.
Adesanya did not deny the substance of the conversation but said the diplomatic cable represented only part of a longer discussion.
The tribunal concluded that Atiku had a considerable degree of power and influence within the Federal Government during the first half of 2003.
However, the tribunal did not find that Atiku personally directed the $500,000 transfer.
It also noted that Atiku was not a party to the arbitration and did not testify.
The tribunal’s assessment of the payment therefore centred on whether Adesanya had established the explanation he offered for the transaction in the context of Sunrise’s contractual dispute with Nigeria.
Sunrise commenced arbitration against Nigeria in 2017, seeking about $2.35bn over an alleged breach of the purported 2003 agreement.
The parties later negotiated a settlement under which Nigeria was expected to pay Sunrise $200m.
A subsequent dispute over the settlement led Sunrise to seek an additional $200m default payment, taking its principal claim in the second arbitration to $400m before interest.
The ICC tribunal dismissed Sunrise’s claims and rejected its request for an order compelling Nigeria to pay the $200m settlement sum and the additional $200m default amount.
The tribunal also held that it had jurisdiction over Nigeria’s counterclaim against Sunrise and Adesanya.
It ordered Sunrise and Adesanya to reimburse Nigeria for 75 per cent of its legal fees and expenses.
Nigeria’s recoverable costs were assessed at $11.82m, with $2.5m to be drawn from funds held in escrow by the ICC.
The remaining approximately $9.32m is payable by Sunrise and Adesanya, with interest.
Atiku has consistently denied wrongdoing in relation to the allegations surrounding the Mambilla project.
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