Nigeria and Vietnam have proposed new restrictions on compensation awarded to foreign buyers in international disputes, searching for to limit speculative claims and stop extreme monetary liabilities for governments.
The two international locations 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 make sure that compensation awarded by international arbitration tribunals displays legally recoverable losses straight attributable to confirmed violations, somewhat than speculative monetary projections.
Proposed guidelines goal investor compensation awards
Under the proposed guidelines, buyers can be required to set up their losses by clear and convincing proof, whereas financial compensation wouldn’t exceed their whole 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 truthful market worth instantly earlier than the expropriation grew to become publicly identified.
- The international locations additionally need tribunals to think about whether or not buyers contributed to their losses by deliberate actions or negligence.
Other components embody whether or not buyers took affordable steps to minimise their losses, whether or not they had already acquired compensation for a similar harm, and whether or not the alleged losses may moderately have been foreseen when the treaty violation occurred.
Proposal targets monetary dangers for governments
The proposed restrictions may assist growing international locations 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 underneath UNCITRAL and haven’t been adopted as international guidelines. Their eventual affect will rely on the end result of the reform course of.
Nigeria’s observe file 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 dominated in Nigeria’s favour, rejecting claims by Sunrise Power and Transmission Company price a mixed $3.38 billion over disputes linked to the Mambilla Hydroelectric Power Project.
In October 2023, a UK courtroom dismissed Process & Industrial Developments’ (P&ID) $11 billion declare towards Nigeria, setting apart an arbitration award initially price $6.6 billion plus curiosity. The courtroom discovered that the award had been obtained by fraud and was opposite to public coverage.
In February 2026, an international tribunal reportedly dismissed a $6.2 million declare by European Dynamics UK Ltd towards Nigeria over a nationwide digital authorities procurement mission.
