Tribunal Orders Bankers’ Committee To Pay N19.4bn For Breach Of Contract
An arbitration tribunal in Lagos has directed SANEF Creatives Ltd, a subsidiary of the Bankers’ Committee of the Central Bank of Nigeria (CBN), to pay N19.4 billion to Hanson Dredging and Marine Service Ltd (HDMS) for unlawfully terminating a dredging and reclamation contract at the Lagos Creative Entertainment Centre, also known as the National Theatre.
The ruling, delivered by sole arbitrator Ayo Fanimokun on December 30, 2024, concluded a legal dispute that began in 2023. The dispute arose after SANEF terminated the contract in May 2022, despite HDMS reportedly completing over 60% of the project.
HDMS, represented by Senior Advocate of Nigeria Dr. Charles Mekwunye, argued that the contract, signed in November 2021, was affected by unforeseen challenges such as delays caused by government agencies, pipeline rerouting, and the economic impact of the COVID-19 pandemic. Instead of renegotiating, SANEF terminated the contract, citing delays beyond the stipulated 36-week timeline.
HDMS also accused the CBN of unlawfully debiting N4.2 billion in advance payments from its account. The company sought multiple reliefs, including declarations that the termination was unlawful and demands for general and special damages totaLling N35 billion.
SANEF, represented by lawyer Paul Usoro (SAN), maintained that the termination was lawful and counterclaimed N70 billion, alleging losses and HDMS’s refusal to remove equipment from the project site.
After eight sittings, submission of 46 exhibits, and testimony from expert witnesses, the tribunal ruled in favor of HDMS on five of six key issues.
Arbitrator Fanimokun held that SANEF’s delay in terminating the contract on the original due date of February 11, 2022, constituted a waiver of its right to insist on time as an essential element of the agreement. The tribunal noted:
“If time was strictly of the essence, SANEF’s failure to terminate the contract by the agreed deadline was a waiver of its right to do so later.”
The tribunal also acknowledged the impact of exceptional risks, including the pandemic, pipeline rerouting, and delays caused by government agencies, as valid factors affecting the project timeline.
The tribunal condemned the CBN under its former governor, Godwin Emefiele, for unlawfully recalling the advance payment from HDMS’s account. Fanimokun described the action as a “gross abuse of power” that disregarded the work already completed by the contractor.
The tribunal awarded:
- N9.1 billion in special and general damages to HDMS.
- N5.33 billion for the value of the work completed (over 60%).
- 25% interest per annum on the N19.4 billion award from the date of the ruling.
The tribunal emphasized SANEF’s failure to address the delays through negotiation or contract extensions, declaring the termination premature and unlawful. It called for accountability in contract management and condemned the abuse of institutional power in the case.
The ruling marks a significant precedent in enforcing fairness in contractual disputes involving public institutions and private firms.
