Nigeria and Vietnam have proposed new restrictions on compensation awarded to foreign buyers in international disputes, looking for to limit speculative claims and stop extreme monetary liabilities for governments.
The two nations submitted the joint proposal through the fifty fifth session of the United Nations Commission on International Trade Law (UNCITRAL) Working Group III, held in Vienna from October 12 to 16, 2026, as a part of ongoing negotiations to reform investor-state dispute settlement.
The proposal seeks to be sure that compensation awarded by international arbitration tribunals displays legally recoverable losses straight attributable to confirmed violations, fairly than speculative monetary projections.
Proposed guidelines goal investor compensation awards
Under the proposed guidelines, buyers can be required to set up their losses by way of clear and convincing proof, whereas financial compensation wouldn’t exceed their complete expenditure on the funding, adjusted for inflation.
Nigeria and Vietnam additionally proposed proscribing curiosity awarded earlier than and after arbitration selections to easy curiosity calculated at a risk-free charge.
They additional proposed that curiosity calculations ought to adjust to the legal guidelines relevant in the nation going through the declare on the time of the alleged violation.
If adopted, the measures may considerably change how international arbitration tribunals calculate compensation in disputes between foreign buyers and governments.
Proposal outlines guidelines for expropriated property
The joint submission additionally addresses compensation in circumstances involving direct expropriation, proposing the restitution of property or an alternate financial compensation association.
- Under the proposed financial possibility, compensation can be based mostly on the property’s honest market worth instantly earlier than the expropriation turned publicly identified.
- The nations additionally need tribunals to think about whether or not buyers contributed to their losses by way of deliberate actions or negligence.
Other components embody whether or not buyers took cheap steps to minimise their losses, whether or not they had already obtained compensation for a similar harm, and whether or not the alleged losses may fairly have been foreseen when the treaty violation occurred.
Proposal targets monetary dangers for governments
The proposed restrictions may assist growing nations limit their publicity to substantial compensation awards arising from funding disputes whereas sustaining a framework for addressing confirmed violations of foreign buyers’ rights.
The proposals stay topic to negotiations beneath UNCITRAL and haven’t been adopted as international guidelines. Their eventual impression will rely on the end result of the reform course of.
Nigeria’s observe document in international arbitration
Nigeria has confronted a number of high-value international arbitration disputes, highlighting the monetary dangers governments can face when foreign buyers search compensation.
In September 2026, Nairametrics reported that an International Chamber of Commerce (ICC) tribunal had ruled in Nigeria’s favour, rejecting claims by Sunrise Power and Transmission Company value a mixed $3.38 billion over disputes linked to the Mambilla Hydroelectric Power Project.
In October 2023, a UK court dismissed Process & Industrial Developments’ (P&ID) $11 billion claim against Nigeria, setting apart an arbitration award initially value $6.6 billion plus curiosity. The court docket discovered that the award had been obtained by way of fraud and was opposite to public coverage.
In February 2026, an international tribunal reportedly dismissed a $6.2 million claim by European Dynamics UK Ltd against Nigeria over a nationwide digital authorities procurement mission.
