The Attorney General of the Federation and Minister of Justice, Prince Lateef Fagbemi, SAN, has called for reforms to the United Nations framework governing investor-state disputes, saying such reforms should strengthen the protection of national sovereignty.
Fagbemi made the call during a heads of delegations roundtable at the Chief Legal Advisors Forum (CLAF) 2026 in Singapore.
He argued that reforms to Investor-State Dispute Settlement (ISDS) should reinforce, rather than bypass, domestic courts.
The AGF said Nigeria’s economy could have been severely damaged by the case instituted against the country by Process and Industrial Developments Limited (P&ID).
He recalled that Nigeria was at risk of losing more than US$11 billion until a United Kingdom Commercial Court in 2023 nullified a US$9.6 billion arbitral award secured by P&ID over a failed gas supply agreement that was subsequently found to have been fraudulent.
Fagbemi said Nigeria’s experience had strengthened its position in support of reforms that would address weaknesses and imbalances in the international dispute-resolution system.
He said such reforms were necessary to protect investments while also safeguarding the interests of governments and taxpayers.
According to him, global investment patterns and emerging development challenges had made the need for a modern, balanced and credible dispute-settlement system increasingly urgent.
The AGF said that upon assuming office, he constituted a committee of experts to review Nigeria’s bilateral investment treaties and commitments under multilateral treaties and conventions.
In a statement signed by his media aide, Kamarudeen Ogundele, Fagbemi said Nigeria became a strong advocate for greater clarity in the calculation of damages because of the P&ID experience.
“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,” he said.
He added: “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.”
Fagbemi said the use of compound interest in calculating damages in the P&ID case could have had a crippling financial impact on Nigeria.
“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 added.
The minister said UN member states had acknowledged the need for ISDS reform to preserve the credibility of the international investment regime.
“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 incremental changes might not be enough to address structural problems in the existing system.
“Many states, Nigeria included, believe that incremental adjustments will not address the structural imbalances embedded in the current system,” Fagbemi said.
He called for clearer treaty standards, stronger procedural safeguards, greater accountability and a better balance between investor and state rights.
The AGF also said Nigeria supported innovations aimed at reducing costs, preventing disputes from escalating and promoting cooperative solutions.
“Strengthening national judicial institutions is central to building long-term rule-of-law capacity and reducing over-reliance on external arbitration,” he said.
Fagbemi added that investment protection must not undermine legitimate public-interest regulation.
He noted that Nigeria’s 2016 Model Bilateral Investment Treaty was currently under review after a decade of implementation.
“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.
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