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Afe Babalola & Co. represented the Federal Government of Nigeria in the landmark victory won at the world-renowned International Centre for Settlement of Investment Disputes (ICSID) on Tuesday, 6th October 2020. ICSID is an international arbitration institution established by the World Bank in the USA for the resolution of legal disputes and conciliation between international investors.


Two companies – Interocean Oil Development Company and Interocean Oil Exploration Company – instituted an arbitration proceeding against the Federal Government of Nigeria before the ICSID Tribunal, Washington DC, USA chaired by Professor William W. Park. The claim borders largely on the Claimant’s loss of the 40% participating interest in the Nigerian Oil Mining Lease 98 (“OML 98”) and Oil Prospecting License 275 (“OPL 275”) which were both created pursuant to a joint venture agreement between the Nigerian National Petroleum Corporation (NNPC) and Pan Ocean Oil Company, the Claimant’s holding company in Nigeria. The case was therefore about the ownership and control of Pan Ocean Oil Corporation, the beneficial owner of both OML 98 and OPL 275.

In an attempt to claim the ownership and control of the Pan Ocean Oil Corporation, the Claimants and their owners (foreign nationals) had initiated several unsuccessful litigations against the Nigerian directors of Pan Ocean at the Federal High Court and Court of Appeal in Nigeria alleging that they (Claimants) were the legitimate owners of Pan Ocean. Upon the dismissal of these suits, the Claimants resorted to initiating an arbitration before the ICSID Tribunal to allege that the Federal Government of Nigeria colluded with the Nigerian directors of Pan Ocean to deprive them (Claimants) of their interests in Pan Ocean. The reference was initiated in September 2013.

The Claimants sought, among others, a declaration that the Federal Republic of Nigeria had breached its obligations to the Claimants under the Nigerian law and/or international law; an award directing the Federal Government of Nigeria to restore only the nominees of the Claimants as representatives in the 40% participating interest under the operation of all Joint Venture Agreements and OML 98 and OPL 275; and an award of USD$2 billion against the Federal Government of Nigeria for its alleged breach of Nigerian and International Laws.

The Federal Government of Nigeria, as the Respondent, was represented pro bono by our firm. The party representatives for the Federal Government were the past and present Solicitor-General and Permanent Secretary, Federal Ministry of Justice.


During hearing, Mr. Jacques Jones, Patricio Fabri, among others, testified for the Claimants. In addition, the Claimants called Professor Yinka Omorogbe, Professor Fidelis Oditah QC, SAN, and Mr. Geoffrey J. Barker as expert witnesses. On the other hand, Mr. Ahmed Rufai Khalid of NNPC and Mr. Bala Muhammed Yusuf of the Ministry of Petroleum Resources testified as factual witnesses for Nigeria, while Hon. Justice Emmanuel Olayinka Ayoola JSC (Rtd.), Professor Lawrence Atsegbua, SAN, Engr. Bello Mustapha FNSE (former Executive Secretary of the NIPC) and Dan Harris testified as expert witnesses for the Respondent, the Federal Republic of Nigeria.

At the end of the reference which lasted 7 years, the Tribunal absolved the Federal Republic of Nigeria of any liability relating to the Claimant’s loss of control over Pan Ocean Oil Corporation. In finding that the Federal Government of Nigeria did not breach its obligations towards the Claimants either under the Nigerian or International Law, the Tribunal dismissed the Claimants’ claims for damages and for restitution as the beneficial owner of the 40% participating interest in OML 98 and in addition, the Tribunal awarded the sum of USD$660,129.87 as arbitration costs in favour of the Federal Government of Nigeria.

Indeed, this judgment is a big win for the Federal Government of Nigeria and its legal team, headed by Aare Afe Babalola, SAN, who handled the case over the course of the past 7 years pro bono. No doubt, the dismissal of the Claimants’ claim against Nigeria by ICSID is one which, yet again, puts Nigeria in positive limelight as a nation having regard to the rule of law in all its dealings with both local and international business entities. The Tribunal’s findings that ‘the alleged wrongdoings are not attributable to Respondent or do not form part of a concerted effort involving Respondent to deprive Claimants of their investment’ positively reinforces Nigeria’s commitment to investment promotions and enforcement of the rule of law.

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