Abuja (Sundiat Post) – In view of the controversial $9 billion judgment recently obtained in the UK by Messrs P & ID against Nigeria, a former House of Representatives member, Hon Kayode Oladele has identified certain odious provisions, which he describes as ‘killer clauses’ in government agreements with contractual parties that often lead to disastrous outcomes for the country when such agreements eventually become subjects of litigation and suggested what must be done to avoid similar occurrence in future.
Hon. Oladele, immediate past Chairman, House Committee on Financial Crimes said that international litigation of contracts entered into by Nigeria with foreign contractual parties, mostly private firms often run into certain fundamental challenges which always spell disaster for the country due to the insertion of some avoidable obnoxious clauses in the agreement.
The former lawmaker who is an international lawyer stated that his experience was borne out of studying several government contracts and also representing Nigeria in similar litigation in the past.
According to him, unfortunately hardly can one come across any contracts executed between Nigeria and foreign contractual parties without coming across these clauses. According to Oladele, the clauses are : firstly, waiver of sovereign immunity; secondly, Arbitration clauses; thirdly, nominating foreign jurisdictions for arbitration and fourthly, finality (non-appealability) of Arbitration awards.
He posited that in the “context of law and arbitration, any agreement by government or a state entity to arbitrate is often regarded by courts, though not always, as a waiver of immunity by the government or its contracting Agency.
“This is so because once the government agrees to arbitrate, it immediately confers jurisdiction on an Arbitration tribunal so stated.Sovereign immunity shields governments from lawsuits except in relation to certain actions.
It protects a state or a government from suits for money damages.“Therefore, the government cannot be sued unless it consents to the litigation. Why would Nigeria or anyone representing Nigeria freely waive such an important right in any contract?
“The effect of waiver of immunity is to reduce a state or government agency to an ordinary individual who could be sued so freely and whose properties can easily become subjects of attachments to satisfy judgment debts.
“That is exactly what happened in the instant case. We voluntarily throw away our greatest weapon and defense.
Let’s for a moment forget about the content of the contract itself or the intention of the government in entering into the contract and whether or not the government was liable for any breach, assuming without conceding that there was a breach.
Certain noxious clauses in the agreement itself are the causes of this problem,” the former lawmaker stated.Speaking further, Hon. Oladele stated that disturbed by this trend some years ago, he personally contacted a former Attorney General of the Federation on the need to “discourage the use of arbitration clauses in contracts involving Nigeria and that if there is a compelling reason to use one, it must always be clearly spelt out that the Arbitration must take place in Nigeria.
“This becomes necessary because, in the first place, whatever contract that is entered into is expected to be executed in Nigeria and for the benefit of Nigeria.
Furthermore, Nigeria has sufficient Arbitration laws to address whatever provisions are contained in those arbitration clauses and the contract itself.
“This becomes imperative because it is very difficult for Nigeria to keep up with Arbitration schedules slated for foreign countries, a situation that may also lead to default rulings.”
Going further, Hon. Oladele condemned the practice of inserting a clause to the effect that the decision of an Arbitration panel shall be final particularly in government contracts.
“Where is that done and in whose interest is such a detrimental clause inserted? For sure, finality of Arbitration rulings undermines the entire judicial process and it is a negation of the rule of law and the right of appeal enshrined in the constitution?” he said.
The former lawmaker with a vast international litigation experience appeals to Nigerian lawyers to be “very meticulous when drafting agreements between Nigeria and contractual parties and avoid situations where their negligence can become very costly and embarrassing to the country.”
He reminded Nigerian lawyers that they must remember to always act in the best interest of their clients noting however that no client’s interest can rise above the interest of the country.
“The legal profession is the only profession where it’s members swear to an oath not only to act in the best interest of their clients but also to uphold the rule of law and sovereignty of the country,” he stressed.
Hon. Oladele also tasked the Office of Attorney General of the Federation to mandate Federal Ministries, Departments and Agencies (MDAs) to submit all multinational contracts for vetting before such could be signed or executed in order to avoid an erosion of the sovereignty of the country or acts that may be detrimental or prejudicial to the overall public interest. (Tribune).