Nigerian Litigation And Arbitration Law

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The Nigerian Public Procurement Act (2007) and Debarment of Multinational Corporations from Participating in Government Contracts: Unanswered Questions on Blacklisting Rules (Final Part) January 2009 Vol. 22: Issue 1 It has to be presumed that good governance principles and ethics in public procurement procedures inspired the emergence of the PPA Act of 2007 in Nigeria. It is significant that the Nigerian PPA has the potential to promote valuesbased procurement with reasonable checks and balances. It also has the capability of enabling commercial entities engaged in public procurement to define clear roles and responsibilities within their organizations. More importantly, the establishment of independent external oversight of procurement activities is a radical improvement on the old order. Another innovation introduced by the Nigerian PPA is the creation of a body of common centralized rules and practices governing public procurement at the federal tier of government. It may therefore be said with conviction that the avowed policy of the Nigerian government as expressed in the PPA is to bring issues of public procurement within the ambit of legal control and transparent assessment.

However, there are serious deficiencies with the PPA Act of 2007. The most troubling is that the legislation does not make provisions for legal review of or appeals against administrative decisions blacklisting or barring a business entity from participating in public procurement on grounds of corruption of public officials. A credible regime on public procurement must of necessity submit itself to public and judicial scrutiny. The absence of this quality in the PPA potentially leaves disaffected or aggrieved business entities at the mercies of omnipotent government officials entrusted with the powerful discretion of determining when and if a particular blacklisting would hold and for how long. Considering that the most remunerative contracts in Nigeria are often awarded by government agencies, it may be imprudent for a blacklisted business entity to pursue litigation and judicial review of the blacklisting exercise. Indeed, the question of whether to take legal measures against the Federal Government for “blacklisting” becomes more of a political/commercial judgment as distinct from legal. Be that as it may, a pursuit of legal remedy ought to be encouraged if the full promises of the PPA are to be realized. However, prior to undertaking a legal action for judicial review of a

©Blackfriars LLP 2008. All rights reserved. This document is for general guidance only. Definitive advice should be sought from counsel if required. Blackfriars LLP is a Nigerian law firm with a representative office in Toronto, Canada.

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blacklisting exercise, attention must be paid by affected business entities to the grounds for which the Bureau has debarred that business entity from public procurement in Nigeria. Although the PPA is silent on the grounds for overturning disbarment of business entities, it stands to reason that the general rules of fair hearing and due process would constitute valid grounds for an application to overturn a disbarment order. Business entities in Nigeria which have been blacklisted by the Bureau may go either by way of an application for judicial review or if the PPA is applicable, raise a challenge on the grounds of non-compliance with the PPA. With regards to the former, an appeal may be filed at the Federal High Court in accordance with general principles of Nigerian law regarding decisions or actions of government agencies under section 251(1)(r) of the Constitution FRN 1999. With respect to circumstances where the PPA is applicable, it is advisable to issue a 30 days pre-action notice to the Bureau before any suit is commenced. Section 14(1) of the PPA stipulates that the pre-action notice against the Bureau should clearly and explicitly state: a. The cause of action; b. The particulars of the claim; c. The name and address of legal practitioner of the intending plaintiff; and

d. The relief being sought.

For further inquiries, please contact: Ms. Nkeiru Onyeaso Email: [email protected] Tel: +234 808 718 0833 Fax: +234 1 2694781 Dr. Pius Okoronkwo Email: [email protected] Tel: +647 831 7487 Fax: +234 1 2694781 Dr. Chidi Oguamanam Email: [email protected] Phone: +234 1 739 0397 (Lagos) Phone: +1 902 494 7125 (Halifax) Fax: + 234 12694781

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©Blackfriars LLP 2008. All rights reserved. This document is for general guidance only. Definitive advice should be sought from counsel if required. Blackfriars LLP is a Nigerian law firm with a representative office in Toronto, Canada.