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THISDAY ONLINE: Shell BP Drags Nigeria to Arbitration Panel

From Constance Ikokwu in Washington DC, 08.07.2007
Shell British Petroleum has dragged the Federal Government to the International Centre for Settlement of Investment Disputes (ICSID), an arm of the World Bank Group, over a dispute concerning hydrocarbon concession.

The case entitled Shell Nigeria Ultra Deep Limited versus Federal Republic of Nigeria with case no ARB/07/18 was registered on July 26, 2007 and is the second case ever brought against Nigeria in the 42-year existence of the ICSID.

Details of what constitutes the alleged infraction by Nigeria were not clear last night.

Shell is represented by the law firm of Clifford Chance, London.

THISDAY gathered that a tribunal is yet to be constituted to hear the case.
But information made available to THISDAY also indicates that the parties concerned have to agree on the number of arbitrators and the method of their appointment.

In the event that they fail to agree, the default rule requires a tribunal of three arbitrators, one appointed by each side and a third who shall be president, appointed with the agreement of both parties.

If the parties fail to agree on the third arbitrator after 90 days of the case being registered, either party is free to approach the ICSID to appoint an arbitrator.

In an interview with THISDAY in Washington DC, Senior Counsel, ICSID, Ucheora Onwuamaegbu, said the constitution of a tribunal could take some months depending on the parties.

Commenting on the sensitivity of the case and the implications for Nigeria, he observed that “in every dispute, adequate legal representation is crucial.  Improper representation could lead to either non-participation in the process or an in effectual one.

“The main thing a government could loose from that would be to send the wrong message to the international investment community which would ultimately affect investor confidence in the country. This is of course aside from huge potential financial implications directly linked to the particular case,” he added.

Onwuamaegbu noted that ICSID cases were closely watched by the foreign investment community.

“How a government handles such proceedings could be seen as indicative of how it deals with foreign investors,” he said.

ICSID administers a resolution of investment-related disputes between foreign investors and governments of various countries.

The first case brought against Nigeria at the ICSID was Guadalupe Gas Products Ltd versus Nigeria, in March 1978, concerning production and marketing of liquefied natural gas. The case was resolved by amicable settlement in 1980. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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