Leno Adesanya, promoter of Sunrise Power and Transmission Company Limited, has told an international arbitration tribunal that he transferred $500,000 to Jennifer Douglas, then wife of former Vice-President Atiku Abubakar, in January 2003 as part of a foreign-exchange transaction carried out for Atiku.
According to The Cable, the payment was made on January 30, 2003, through China Castle Investments Limited, an offshore company controlled by Adesanya, less than four months before Sunrise was purportedly awarded a build-operate-transfer contract for the Mambilla Hydroelectric Power Project in Taraba State.
Details of the transaction and Adesanya’s explanation are contained in the final award issued by a three-member International Chamber of Commerce (ICC) tribunal in the arbitration between Sunrise and the Federal Republic of Nigeria.
The tribunal rejected Sunrise’s claims against Nigeria and ordered the company and Adesanya to reimburse the Federal Government for 75 per cent of its legal fees and expenses.
During the arbitration, Nigeria alleged that the $500,000 transfer to Douglas was connected to the disputed award of the Mambilla contract. Sunrise and Adesanya denied the allegation, maintaining that the payment was unrelated to the project.
Adesanya said he had operated a bureau de change business through Moneyline Ventures Limited and that the money transferred to Douglas’s Citibank account in the United States represented dollars purchased for Atiku with naira.
“I confirm that I made a transfer of $500,000 to the Abubakars through my company China Castle Investments Ltd in early 2003,” Adesanya said in his fourth witness statement, according to the award.
He also acknowledged under cross-examination that he transferred the money to Douglas.
However, the tribunal said Adesanya failed to produce documents showing the underlying naira payment, the exchange rate applied, instructions from Atiku or his aides, correspondence relating to the transaction, or records establishing its commercial purpose.
Adesanya told the tribunal that the discussions surrounding the transaction were oral and that, more than two decades later, he no longer had access to written exchanges that might have existed.
Neither Atiku nor Douglas testified in the arbitration, while Sunrise and Adesanya did not submit a witness statement or declaration from either of them to corroborate the foreign-exchange explanation.
According to the award, Adesanya said he attempted to secure Atiku’s testimony but that the former vice-president was reluctant to become involved in proceedings concerning former President Olusegun Obasanjo.
Adesanya initially suggested that Atiku, through his lawyers, had confirmed that the payment was a foreign-exchange transaction. Under cross-examination, however, he said the explanation had been relayed to him by “Dr Ndukwe”, whom he identified as Atiku’s medical doctor, while a later confirmation came through lawyers.
Asked whether the confirmation actually originated from Atiku, Adesanya described this as his “logical assumption”, saying he did not believe Atiku’s lawyers would have provided the information without consulting him.
The tribunal said Adesanya produced no correspondence, telephone records or other evidence of his alleged contacts with Atiku’s counsel, Ndukwe or the former vice-president’s aides.
PAYMENT CAME DURING MAMBILLA NEGOTIATIONS
The $500,000 transfer took place against the background of negotiations over the Mambilla project that had begun in 2001.
Sunrise and North China Power Engineering Company had expressed interest in participating in the project in September 2001, while Sunrise was incorporated in Nigeria the following month to identify investment opportunities, principally in the power sector.
On October 18, 2001, Sunrise wrote to then President Obasanjo and Atiku informing them of its interest, alongside its Chinese partner, in developing the hydropower project.
Atiku and his team subsequently met representatives of Sunrise and the Chinese company on November 13, 2001.
The tribunal’s record showed that the then vice-president said the project was expected to cost about $6 billion, while the companies reaffirmed their interest in developing it.
In July 2002, Atiku led a Federal Government delegation to China which included the then Minister of State for Power and Steel and Adesanya.
During the trip, Nigerian officials and Chinese companies signed a memorandum of understanding covering several power projects, including the first phase of Mambilla, then estimated to cost $4.5 billion and generate 2,600 megawatts.
On December 9, 2002, the Ministry of Power invited Sunrise to a meeting scheduled for January 15, 2003, to discuss and agree on the principal terms and conditions for executing the project.
Sunrise presented its tender to a multi-agency technical committee on January 15 or 16. The committee included officials from the ministries of power, water resources and finance, as well as representatives from the Debt Management Office, Federal Inland Revenue Service and the National Electric Power Authority.
It was about two weeks later, on January 30, that China Castle transferred the $500,000 to Douglas’s Citibank account.
SUNRISE RECOMMENDED FOR PROJECT
On March 12, 2003, the technical committee recommended Sunrise for the 3,960MW project after assessing proposals submitted by four companies.
The committee cited Sunrise’s cost effectiveness, capacity to execute the project and its economic implications, and proposed further negotiations to refine the technical terms.
Sunrise had offered a tariff of 2.1 US cents per kilowatt-hour under a 40-year build-operate-transfer arrangement.
On April 7, then Minister of Power Olu Agunloye wrote to Obasanjo seeking approval to issue Sunrise a letter of comfort, begin negotiations on the concession and financing, determine how the government’s proposed 25 per cent equity would be funded, and appoint technical consultants.
Obasanjo subsequently directed that the matter be presented to the Federal Executive Council.
Agunloye submitted a memorandum to the council on May 15. The proposal was considered at the council’s May 21 meeting, but whether the council approved the contract became a major point of dispute in the arbitration.
Obasanjo maintained that the council did not approve the contract and that he ordered the memorandum withdrawn.
Sunrise, however, relied on a letter issued by Agunloye on May 22, 2003, as evidence that it had been awarded the project on a build-operate-transfer basis.
That disputed letter later formed the basis of Sunrise’s multibillion-dollar arbitration claim against Nigeria.
TRIBUNAL EXAMINES ATIKU’S ROLE
Sunrise and Adesanya argued that Atiku lacked the political power to influence the purported May 2003 award.
The tribunal rejected that contention, noting Atiku’s involvement in discussions on Mambilla from at least 2001, including his meeting with Sunrise and its Chinese partner and his leadership of the Nigerian delegation to China in 2002.
The tribunal also considered a February 2003 US diplomatic cable which described Adesanya as an “Atiku insider” and an associate of the then vice-president.
The tribunal concluded that Atiku possessed a considerable degree of power and influence within the Federal Government during the first half of 2003.
However, Atiku was not a party to the arbitration and did not testify before the tribunal.
The tribunal ultimately said the absence of corroborating evidence, alongside inconsistencies in Adesanya’s testimony, meant it could not accept his explanation that the $500,000 was a foreign-exchange transaction carried out for Atiku.
It also found that Adesanya failed to prove that Moneyline Ventures Limited held a bureau de change licence at the relevant time.
The tribunal noted that even evidence of a Moneyline licence would not have resolved the issue because the transfer was made by China Castle, not Moneyline. Adesanya accepted that China Castle was not licensed to conduct foreign-exchange transactions and that such transactions were outside its stated corporate purposes.
SUNRISE CLAIMS REJECTED
Sunrise commenced its first arbitration against Nigeria in 2017, seeking about $2.35 billion over an alleged breach of the 2003 agreement.
The parties later negotiated a settlement under which Nigeria was to pay $200 million, but a further dispute arose over the settlement, with Sunrise seeking another $200 million as a default payment.
In its final award, the ICC tribunal dismissed Sunrise’s claims and rejected its request for an order compelling Nigeria to pay the $200 million settlement sum and the additional $200 million default amount.
The tribunal also held that Adesanya was bound by the arbitration provisions in the settlement agreement and had jurisdiction over Nigeria’s counterclaim against him and Sunrise.
It ordered Sunrise and Adesanya to reimburse Nigeria for 75 per cent of its legal fees and expenses, with Nigeria’s recoverable costs put at $11.82 million.
Atiku has consistently denied wrongdoing in connection with the matters involving Douglas.
Comments had been sought from Atiku’s media adviser, Paul Ibe, and his Senior Special Assistant on Public Communication, Phrank Shaibu.
(Story, originally published by The Cable, headline tweaked)
