Nigeria has called for reforms to the international investor state dispute settlement system, arguing that arbitration rules should better protect national sovereignty while maintaining credible safeguards for investors.
Attorney General of the Federation Lateef Fagbemi made the proposal at the Chief Legal Advisers Forum in Singapore.
He said Nigeria supported changes that would strengthen transparency, improve consistency in arbitral decisions and reduce uncertainty over damages.
Fagbemi argued that investment dispute mechanisms should reinforce rather than bypass domestic courts.
The minister referred to Nigeria’s experience in the Process and Industrial Developments case as an example of the risks created by opaque proceedings and large damages calculations.
Nigeria successfully defeated an arbitral award in that dispute after a United Kingdom court found serious misconduct surrounding the underlying process.
Fagbemi said the potential financial exposure from the P and ID award could have had severe consequences for the economy.
He argued that damages calculations should not depend excessively on the discretion of individual tribunals.
The Attorney General said Nigeria had also revised its domestic arbitration law and was reviewing bilateral investment treaties and commitments under multilateral agreements.
He said reform of investor state dispute settlement was necessary to create a system that remained legitimate for both capital importing and capital exporting countries.
Nigeria supports clearer treaty standards, stronger procedural safeguards and more balanced rights and obligations.
Fagbemi also said public interest considerations such as climate policy, environmental protection, human rights and community welfare should be recognized in investment disputes.
He argued that strengthening national courts could reduce over reliance on external arbitration.
The minister said Nigeria was open to mechanisms that reduced costs, encouraged early settlement and promoted cooperative problem solving.
He said reform should ultimately protect legitimate investments without limiting the ability of governments to regulate in the public interest.
