Hanson Dredging and Marine Services Limited, a contractor, secured a significant victory in an arbitration case against Sanef Creatives Limited, winning a multi-billion naira award for breach of contract. The tribunal, presided over by Ayo Fanimokun, awarded N9.1 billion in special damages and N5 billion in general damages to Hanson Dredging.
Hanson Dredging and Marine Services Limited, a contractor appointed in 2021 to execute dredging and reclamation work for Lagos Creative and Entertainment Centre, has won a multi-billion arbitration against Sanef Creatives Limited, which awarded the contract more than three years ago. An arbitration tribunal overseen by Ayo Fanimokun in Lagos, on 30 December 2024, awarded N9.
1 billion to Hanson Dredging in special damages and N5 billion in general damages for breach of contract terms by the respondent. Hanson Dredging is also entitled to “interest on the total sum awarded as prayed in its point of claim since inflation has eroded the value of the money significantly,” according to a ruling document seen by PREMIUM TIMES.The two parties agreed that the claimant would deliver the N7 billion contract within 36 months, with Phase 2A not exceeding a maximum of 12 weeks, including mobilisation. The day the claimant received the advance payment, 19 November 2021, would mark the start date. Globus Bank, the banker to Hanson Dredging, issued an advanced payment guarantee (APG) on behalf of the claimant to Sanef Creatives. Based on economic situations and in line with the contract agreement, Hanson Dredging requested a review of the contract sum, which Sanef Creatives declined to oblige. Instead of granting the respondent’s request, Sanef Creatives terminated the contract and recalled the advance payment guarantee, actions Hanson Dredging said were premature.Afterwards, Hanson Dredging went to arbitration, asking it to be reimbursed for the amount of work it had executed and the expenses it incurred in the process. The company sought a declaration that the termination of the contract is “unlawful, premature and against the spirit and letters of the contract documents executed by the parties.”It also sought a relief that “the respondent having willfully elected not to hold onto and or insist on the time frame stipulated in the contract for the completion of the first phase of the parties’ contract (Phase 2A) within 12 weeks after the receipt of the first phase of the advance payment from the respondent is a clear indication that the respondent upon coming to terms with obvious realities and inevitable challenges that delayed the execution of the contract which qualified as defined risks under Clause 6 (k & l) inter alia, necessitating an extension of time under Clause 7.3 of the contract.” Hanson Dredging claimed that having already executed the contract job to over 60 per cent stage at the time Sanef Creatives ended the contract and ordered the company to demobilise out of the site, it was to be paid for all the unpaid balance for the value of the work it already executed estimated to be N5.3 billion plus accrued and accruing interest.(CBN), had the bank debit the sum of N4.2 billion, being the whole value of the APG, from the account of Globus Bank domiciled with the CBN after terminating the contract. Hanson Dredging prayed the tribunal to order the respondent to pay the interest the latter accrued as a result of the “unlawful debit” at the rate of 21 per cent per annum on the total sum awarded from the date of the arbitral award until final liquidation by the respondent.The issue of whether the respondent can insist on time being the essence of a contract of this nature was central to the dispute. That became imperative given the conduct and condoning actions of the respondent and its agents after the letter of termination of the contract. The articles of agreement for the contract between the two parties state that “time shall be of the essence to this contract.” Hanson Dredging did not finish Phase 2A of the contract as of 11 February 2022, being the end of the 12-week timeframe agreed by both parties, and Sanef Creatives did not issue a notice of default or notice of termination in accordance with the contract. Instead, the respondent issued a notice of default on 11 May 2022 and demanded immediate remediation from the claimant within 14 day
Arbitration Contract Breach Hanson Dredging Sanef Creatives Lagos Creative And Entertainment Centre Ayo Fanimokun
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