An American export company has filed suit against Nigeria, seeking $18 million in damages that it claims it suffered when the West African country canceled a deal to buy wheat and corn at discount prices through a special U.S. program for drought-afflicted African nations.
United Export Trading Co. of Gulfport, Miss., filed the suit last week in the U.S. District Court for the Southern District of New York, alleging that Nigeria broke its contract with the firm after the Agriculture Department had named it winning bidder on 529,000 metric tons of grain.
United Export's suit, filed under the Foreign Sovereign Immunities Act, charged that Nigeria had agreed to pay the $45.3 million purchase price but then, without explanation, backed out of the agreement.
The Agriculture Department subsequently canceled the sale, but according to the suit, United Export continued to negotiate with Nigeria in an effort to sell smaller amounts of grain. United Export complained in its suit that Nigeria then refused to take delivery of two, 20,000-ton cargoes the company had shipped in August from Houston and Corpus Christi.
United Export, meanwhile, paid the USDA for the grain and now either must sell it to another eligible drought-afflicted African country or renegotiate the USDA price to make up the difference between market prices and the subsidized rate Nigeria was to receive.
Nigerian Embassy officials could not be reached for comment yesterday. But in the past, they have maintained, without providing specifics, that United Export had not fulfilled the terms of the contract.
The special sales program for African drought countries was set up this year by Congress as part of a larger package of food aid. In addition to a program of direct gifts to afflicted nations, Congress appropriated $90 million to cover discount sales to qualified countries.
United Export's winning bid on behalf of Nigeria created a stir among other grain traders, who charged that the USDA changed its rules after the bidding began in a way that favored United Export, a company that had no prior experience in grain sales.
Nigeria named United Export as its agent after a series of negotiations in the spring between Roger Crooks, the company chairman, and Nigerian government officials. In letters to the Nigerians, Crooks promised that Rep. Cooper Evans (R-Iowa) would help negotiate a favorable price with the USDA. Aides to Evans denied Crooks' claims.
In an affidavit filed with the suit, Crooks denied "rumors and allegations" suggesting that Nigeria canceled because of "concern over the possibility of irregular or illegal financial arrangements between United Export and government officials in Nigeria related to the . . . purchase by United Export of the subject grains."