The Federal Government of Nigeria has called on the United Nations to introduce reforms that will protect national sovereignty in disputes between investors and states, saying the existing international arbitration framework must be reviewed to achieve greater fairness and predictability.
The Attorney General of the Federation and Minister of Justice, Prince Lateef Fagbemi (SAN), made the call on Thursday at the Heads of Delegations Roundtable of the Chief Legal Advisors Forum (CLAF) 2026 in Singapore.
P&ID Case Would Have Crippled Nigeria’s Economy
Fagbemi said Nigeria’s position was shaped partly by its experience in the long-running dispute involving Process and Industrial Developments Ltd. (P&ID), where the country faced a multibillion-dollar award.
He said the case demonstrated the dangers posed by uncertainty in the calculation of damages in investor-state arbitration.
The minister said Nigeria had therefore become a strong advocate for clear rules on damages, particularly where arbitral awards could impose a heavy financial burden on taxpayers.
“States consistently express concern about the opacity of arbitral proceedings and the unpredictability of awards. Nigeria continues to support reforms that enhance transparency of proceedings, consistency in arbitral reasoning, and predictability in outcomes.
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“These elements are essential for investor confidence and state trust alike. That is why Nigeria is a strong proponent of clarity concerning the calculation of damages,” he said.
Fagbemi stressed that damages in the P&ID case were calculated using compound interest, which he said could have had a crippling effect on Nigeria’s economy, running into billions of dollars.
Nigeria Wants Domestic Courts Strengthened
The AGF said Nigeria supported reforms to the Investors-State Disputes Settlement (ISDS) system that would strengthen, rather than bypass, domestic courts.
He said the reforms should address gaps and imbalances in the existing legal framework while protecting legitimate investments and taxpayers.
“Strengthening national judicial institutions is central to building long-term rule-of-law capacity and reducing over-reliance on external arbitration,” Fagbemi said.
He said Nigeria had taken steps to review its investment treaty obligations since he assumed office, including setting up a committee of experts to examine the country’s bilateral and multilateral treaty commitments.
The review, he explained, was aimed at promoting and protecting investments while ensuring that Nigeria’s interests were adequately safeguarded.
Nigeria Backs Transparency in Arbitration
Fagbemi said Nigeria had reformed its arbitration law to strengthen transparency and was open to new approaches to resolving investment disputes.
“It is with this belief that Nigeria reformed its Arbitration Act to reflect the importance of transparency. There is growing openness to fresh approaches beyond traditional arbitration,” he said.
The minister said states were increasingly recognising that ISDS reform was essential to maintaining confidence in the international investment system.
“Nigeria sees this consensus as a positive development: it signals that the global community understands the need for recalibration to ensure fairness, predictability, and development alignment,” he said.
He argued that minor adjustments would not be sufficient to address what he described as structural imbalances in the existing system.
He called for systemic reforms, including clearer treaty standards, stronger procedural safeguards, greater accountability and a more balanced distribution of rights and obligations between investors and states.
Public Interest Must Be Protected
Fagbemi also urged the integration of public interest considerations into the ISDS framework, saying investment agreements must take into account contemporary priorities such as climate action, environmental protection, human rights, community welfare and sustainable development.
“Nigeria strongly supports reforms that ensure investment protections do not undermine legitimate public-interest regulation,” he said.
He noted that the position was reflected in Nigeria’s 2016 Model Bilateral Investment Treaty, which is currently under review after a decade of use.
The AGF said the reform process should recognise that both capital-importing and capital-exporting countries had shared interests in creating a credible dispute-resolution system.
“There is a growing recognition that the challenges are shared, solutions must be collective, and reform must balance the needs of capital-importing and capital-exporting countries,” he said.
Fagbemi also highlighted the potential of innovative dispute-resolution mechanisms to reduce costs, prevent disputes from escalating and promote cooperation between states and investors.
He said a more balanced system would ultimately strengthen investor confidence while preserving the ability of governments to regulate in the public interest.
Rafiyat Sadiq is a political, justice, and human rights reporter with Pinnacle Daily, known for fearless reporting and impactful storytelling. At Pinnacle Daily, she brings clarity and depth to issues shaping governance, democracy, and the protection of citizens’ rights.