ANNOUNCEMENT 06 Jul 2012In July 2012, the government of Nigeria announced altered domestic business conditions for foreign investors.
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The Wall Street Journal:
Codewit World News:
On July 6, 2012, the Supreme Court of Nigeria issued a ruling that cancelled the acquisition of the formely state-owned ALSCON company by the Russian group Rusal in 2007. The Supreme Court of Nigeria ordered the transfer of the property of ALSCON from Rusal to BFI Group, an American company promoted by a Nigerian. The Supreme Court claimed in its ruling that the Bureau of Public Enterprises, in charge the Nigerian privatisations, wrongly rejected the bid of BFI Group at the time ALSCON was privatised while it was in fact higher than the bid made by Rusal. Thus, according to the Supreme Court, BFI Group is the real winner of the tender for ALSCON and then has to be regarded as the legal owner of ALSCON.
Rusal filed a complaint at the London Court of International Arbitration against the Nigerian government and seeks to either keep the Nigerian smelter or get USD500 million in compensation of expropriation.
Even though it is not clear that the Nigerian court deliberately sought to expropriate a foreign firm, the decision of the court detrimentally affects the original acquirer of ALSCON, a Russian firm.