The Federal Government has called on the United Nations to update rules governing investor‑state arbitration to better protect national sovereignty and reinforce domestic courts, saying current practices risk skewing outcomes against states.
Media aide to the Minister Kamarudeen Ogundel said the Attorney General of the Federation Lateef Fagbemi stated this at a heads‑of‑delegations roundtable during the Chief Legal Advisors Forum 2026, hosted by Singapore’s ministry of law.
He said reforms should increase transparency, improve consistency in awards and clarify how damages are calculated—changes he said are essential to safeguard both investments and taxpayers.
“States consistently express concern about the opacity of arbitral proceedings and the unpredictability of awards,” Fagbemi said.
“Nigeria continues to support reforms that transparency of proceedings, consistency in arbitral reasoning, and predictability in outcomes.”
The Attorney General pointed to a high‑profile arbitration between Nigeria and Process and Industrial Developments Ltd. (P&ID) as a cautionary example.
He said the tribunal’s approach to damages—awarding compound interest—would have imposed multibillion‑dollar liabilities and could have crippled the country’s finances.
Upon taking office, Fagbemi said, he convened a panel of experts to review Nigeria’s bilateral and multilateral treaty commitments to better align investment protections with national law.
Nigeria also revised its Arbitration Act, he said, to ensure transparency and open the door to alternatives to traditional arbitration.
“Many states, Nigeria included, believe that incremental adjustments will not address the structural imbalances embedded in the current system,” Fagbemi said.
“There is increasing support for systemic reform, including clearer treaty standards, improved procedural safeguards, stronger accountability mechanisms, and more balanced rights and obligations for investors and states.”
He urged the international community to consider reforms that integrate public‑interest concerns—such as climate action, environmental protection and human‑rights obligations—into investor‑state dispute settlement (ISDS).
Strengthening domestic judicial systems, he added, is central to reducing reliance on external arbitration and building long‑term rule‑of‑law capacity.
NewsQuest reports that Nigeria’s position aligns with a broader global debate over whether the existing ISDS framework favors investors at the expense of sovereign regulatory space.
Fagbemi described growing momentum behind systemic change and urged collective solutions that balance the needs of both capital‑importing and capital‑exporting countries.
Kamarudeen Ogundele is special assistant to the president on communication and publicity at Nigeria’s attorney‑general office.
August 27, 2026.
