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The federal government has agreed to pay $496 million to settle a multi-billion dollar claim from Global Steel Holdings Limited, following the termination of a contract to upgrade the country’s steel plants, according to a Reuters report.
The news agency quoted Abubakar Malami, attorney-general of the federation (AGF), as saying the federal government managed to get a 91 percent haircut on the original claim of $5.258 billion.
“I pay tribute to President Buhari for his dedication to resolving this problem and wrestling back a crown jewel of our national industrialisation plans rather than leaving the endeavour to the future administration to deal with,” Reuters quoted Malami, who led the negotiations on behalf of the government, as saying.
Global Steel, which is linked to India’s Mittal family, had between 2004-7 acquired rights to Nigeria’s entire state steel industry via five major concessions and share purchase contracts.
The deal also included access to Nigeria’s iron ore reserves and the central railway network.
But in 2008, the government of the late Umaru Yar’Adua terminated the contracts. Global Steel sought arbitration at the International Chamber of Commerce, Court of Arbitration in Paris the same year.
Global Steel Holdings Limited, with headquarters in the United Arab Emirates (UAE), acquired Nigeria’s entire state steel industry via five major concessions and share purchase contracts.
However, the contracts were revoked in 2008 when the federal government accused the firm of asset stripping – a development that led to a court case between the two parties.
Between 2011 and 2020, Global Steel and the Nigerian government made several attempts to settle but the efforts did not yield the expected result.