Learn about the Arbitration Tribunal’s landmark ruling ordering SANEF Creatives to pay N19.4 billion for the unlawful termination of the National Theatre contract. Overview of the Tribunal’s Decision An Arbitration Tribunal in Lagos State has delivered a verdict mandating SANEF Creatives Ltd, a subsidiary of the Central Bank of Nigeria’s (CBN) Bankers’ Committee, to compensate Hanson Dredging and Marine Service Ltd (HDMS) with ₦19.4 billion. The case stemmed from the unlawful termination of a contract involving dredging and reclamation work at the Lagos Creative Entertainment Centre (LCEC), commonly known as the National Theatre. The Sole Arbitrator, Engineer Ayo Fanimokun, made this ruling on December 30, 2024, resolving a contractual dispute between HDMS and SANEF Creatives, a special-purpose vehicle created by the Bankers’ Committee. Background to the Dispute The conflict began in May 2022 when SANEF Creatives abruptly terminated a contract signed with HDMS on November 11, 2021. HDMS had already completed over 60% of the dredging and reclamation project before the termination. HDMS argued that project delays were caused by unforeseen risks, including the impact of the COVID-19 pandemic and economic challenges. The company requested a contract review, but SANEF rejected the request and instead terminated the agreement, citing the 36-week project timeline as the reason. To complicate matters, SANEF, with interference from the CBN, debited ₦4.2 billion already paid to HDMS. In response, HDMS took legal action, seeking relief for what they termed an unlawful contract termination. HDMS’s Claims and Tribunal Findings HDMS, represented by Senior Advocate of Nigeria (SAN) Dr. Charles Mekwunye, sought 13 reliefs, including: In defense, SANEF, represented by Paul Usoro (SAN), argued that the contract’s termination was lawful and filed a ₦70 billion counterclaim, alleging losses due to HDMS’s refusal to remove equipment from the project site. After eight sittings and reviewing 46 exhibits with expert witness testimonies, the Tribunal resolved most issues in HDMS’s favor. Key Rulings by the Tribunal Implications of the Verdict This ruling highlights the importance of adhering to contractual obligations and the consequences of interference by powerful entities like the CBN. The Tribunal’s decision serves as a precedent for similar cases in Nigeria’s legal and business sectors. Conclusion The Arbitration Tribunal’s ₦19.4 billion award to HDMS underscores the need for fairness and accountability in contract enforcement. SANEF Creatives’ actions, deemed premature and unlawful, highlight the critical role of arbitration in resolving complex contractual disputes. Key Takeaways: FAQs What was the original project at the National Theatre?The project involved dredging and reclamation work at the Lagos Creative Entertainment Centre, aimed at transforming the National Theatre into a hub for creative industries. Why was the contract terminated?SANEF Creatives terminated the contract due to delays, citing the expiration of the 36-week project timeline. However, the Tribunal ruled that this action was premature and unlawful. What were the damages awarded?HDMS received ₦19.4 billion in damages and interest, including payments for completed work, special damages, and general damages. READ ALSO: Follow the LMSINT MEDIA channel on WhatsApp: Join Our WhatsApp Group Hear: Chat on WhatsApp Join our Telegram Chanel.
