Nigeria and Vietnam have proposed new restrictions on compensation awarded to foreign traders in international disputes, searching for to limit speculative claims and forestall 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 make sure that compensation awarded by international arbitration tribunals displays legally recoverable losses straight attributable to confirmed violations, slightly than speculative monetary projections.
Proposed guidelines goal investor compensation awards
Under the proposed guidelines, traders could 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 limiting curiosity awarded earlier than and after arbitration selections to easy curiosity calculated at a risk-free price.
They additional proposed that curiosity calculations ought to adjust to the legal guidelines relevant in the nation dealing with 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 traders 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 could be primarily based on the property’s truthful market worth instantly earlier than the expropriation grew to become publicly identified.
- The nations additionally need tribunals to think about whether or not traders contributed to their losses by deliberate actions or negligence.
Other elements embrace whether or not traders took cheap 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 fairly have been foreseen when the treaty violation occurred.
Proposal targets monetary dangers for governments
The proposed restrictions may assist creating nations limit their publicity to substantial compensation awards arising from funding disputes whereas sustaining a framework for addressing confirmed violations of foreign traders’ rights.
The proposals stay topic to negotiations below UNCITRAL and haven’t been adopted as international guidelines. Their eventual impression will rely upon the result of the reform course of.
Nigeria’s monitor report in international arbitration
Nigeria has confronted a number of high-value international arbitration disputes, highlighting the monetary dangers governments can face when foreign traders 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 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 claim by European Dynamics UK Ltd against Nigeria over a nationwide digital authorities procurement undertaking.
