Nigerian tycoon Wale Babalakin gives up $97 million to end Lagos airport feud

Bi-Courtney Aviation Services Ltd., the airport company controlled by Nigerian lawyer and businessman Wale Babalakin, has given up a ₦132 billion ($96.7 million) court award against the federal government under a settlement that ends a dispute of more than 18 years over the private domestic terminal at Lagos' Murtala Muhammed Airport.

The agreements were signed on Oct. 20 in the conference room of Aviation Minister Festus Keyamo in Abuja. The parties were the federal government, the Federal Airports Authority of Nigeria, Bi-Courtney Ltd. and Stabilini Visinoni Ltd., a construction company in Babalakin's group. The Federal Executive Council, chaired by President Bola Tinubu, approved the framework on April 30.

Under the deal, Bi-Courtney waived the judgment debt, which a Supreme Court ruling had set at ₦132 billion plus interest running from 2009. The company also dropped its claim to the old domestic terminal, now called the General Aviation Terminal, which stays federal property operated by FAAN. It gave up an exclusivity clause that barred competing private airports in and around Lagos, a restriction that had stood in the way of a proposed airport at Lekki.

In return, the government and FAAN wrote off concession fees that piled up during the dispute. Bi-Courtney gets back its rights to a four-star hotel and conference center opposite the terminal, which FAAN had taken away in April 2012 over missed construction obligations. The company has 24 months to finish the buildings, which have stood half-built for years, on a revenue-sharing basis. It may also expand its apron and handle regional flights within Africa at MMA2, subject to the terminal's capacity, with the government providing extra land for the apron.

Bi-Courtney now resumes paying fees under the original April 24, 2003, concession, which set the charge at 5% of annual turnover, paid quarterly.

"FAAN had not earned a kobo from MMA2 for the last 20 years because of disputes," Keyamo said at the signing. "Today, FAAN begins to earn its money from that settlement."

Keyamo said neither side hired outside lawyers, and he urged the public to raise the alarm if work on the hotel stalls. When he first announced the terms in May, he said he had told Babalakin no one would pay the judgment debt and that Babalakin wrote it off.

"This is not a win for us alone; it is a win for Nigerians," Babalakin said at the ceremony. "We will not disappoint the President, the Ministry of Aviation and Aerospace Development, FAAN or Nigerians."

Two decades in court

The fight goes back to the fire that gutted Lagos' domestic terminal in 2000. The government first picked Sanderton Ventures Ltd. to rebuild it, then turned to Bi-Courtney, the reserve bidder, when Sanderton failed to deliver. The 2003 concession was signed by then-Aviation Minister Kema Chikwe for 12 years. A February 2007 addendum stretched it to 36 years, running from May 7, 2007, to May 6, 2043. FAAN long argued that the council never approved the extension, while Bi-Courtney said it did.

MMA2 opened in 2007 as Nigeria's first privately financed airport terminal. Bi-Courtney said the government breached the deal by letting airlines keep flying domestic routes from the old terminal, which cut its traffic and left it unable to recover about ₦39 billion ($28.6 million) spent on reconstruction. The courts sided with the company on the old terminal, but successive governments never handed it over.

Claims ran both ways. In 2019, the Asset Management Corporation of Nigeria said Bi-Courtney owed it more than ₦119 billion ($87.2 million), which the company denied. In July 2021, Bi-Courtney said FAAN owed it more than ₦200 billion ($146.5 million) in lost earnings, rejecting then-Aviation Minister Hadi Sirika's claim that it owed the government about ₦13 billion ($9.5 million). Talks to settle began about two years ago on Tinubu's instructions.

Babalakin's empire

Babalakin, 66, is a Senior Advocate of Nigeria who studied law at the University of Lagos and earned a doctorate at the University of Cambridge. He founded the law firm Babalakin & Co. and chairs the Bi-Courtney Group, whose interests span aviation, construction and property.

The airport is not his only clash with the state over a concession. In November 2012, the government of then-President Goodluck Jonathan revoked a Bi-Courtney concession to rebuild the Lagos-Ibadan Expressway, citing poor performance, a decision the company disputed. Babalakin also chaired the governing council of the University of Lagos until he resigned in September 2020.

Figures were converted at ₦1,365 to the dollar.