A change-in-law clause drafted narrowly — covering only new primary legislation — misses most of the regulatory risk that actually disrupts a long-tenor Nigerian concession: ministerial directives, tariff adjustments, new licensing conditions, and agency circulars that carry the force of enforceable regulation without ever reaching the National Assembly.
Define ‘law’ broadly and specifically
A well-drafted clause defines change in law to include regulations, directives, circulars and binding guidance from any competent authority — not just statutes — and specifies the compensation or relief mechanism that applies to each category.
The concessions that survive a change of government are the ones whose contracts never assumed the regulatory environment would stay still.
Discriminatory versus general change
Sophisticated clauses distinguish between a change in law that affects the whole sector and one that discriminates against the specific project — the compensation regime for the latter should be materially stronger, since a targeted regulatory change is a different risk category from a general policy shift.
Making the clause operable
A change-in-law clause is only as useful as its notice and adjustment mechanism — a defined timeline for claiming relief, an agreed method for calculating the financial impact, and a dispute-resolution fallback if the parties cannot agree on the adjustment.
This note is general commentary on Nigerian legal practice and does not constitute legal advice or create a lawyer–client relationship. Outcomes depend on the specific facts and the applicable law at the time. For advice on a particular matter, speak with the firm.
Keep reading
