A Nigerian logistics company, Zenith Carex International Limited, has lost a defamation suit against global development contractor Chemonics International, Inc., in the United States District Court for the District of Columbia, with the court ruling that the claims were barred by a previous settlement agreement between both parties.
According to a copy of the judgement shared with PREMIUM TIMES on Thursday, the court found that the 2022 “full and final settlement” between the two companies put an end to all claims, including defamation, injurious falsehood, tortious interference, and breach of contract, arising from their subcontract and broader business relationship.
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“For the foregoing reasons, it is hereby ordered that Chemonics’ motion to dismiss is granted, and Zenith’s claims are dismissed with prejudice. It is further ordered that the parties shall meet and confer and file a joint status report proposing next steps with respect to Chemonics’ counterclaims, on or before 1 April 2026,” the United States District Judge Loren Alikhan ruled on 18 March.
How it started
According to the filings, the dispute began in 2017 when Zenith Carex entered into a subcontract to provide logistics and supply chain services in Nigeria for Chemonics International.
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The companies executed the arrangement under large-scale US-funded global health programmes implemented through the United States Agency for International Development (USAID), including operations linked to the Global Fund to Fight AIDS, Tuberculosis and Malaria.
Under the contract, Zenith Carex handled the distribution of medical commodities across Nigeria, covering both long-haul and last-mile delivery of health supplies.
In 2020, tensions escalated after Chemonics reported to US authorities that Zenith Carex may have overbilled for logistics services and engaged in improper invoicing practices. That disclosure triggered investigations in the United States and sparked parallel legal and regulatory proceedings in Nigeria, including action by the Economic and Financial Crimes Commission (EFCC).
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The parties later took their disputes to arbitration and filed multiple related court actions before resolving the matter through a 2022 settlement agreement.
The companies ended the arbitration proceedings in 2022 and included a broad mutual release clause in their settlement. Under the agreement, both Zenith Carex and Chemonics waived “all and any claims” arising from their subcontract, performance issues, and related disputes. The US court relied on that clause to dismiss the defamation suit.
Zenith then approached the US court, alleging that Chemonics made defamatory statements to American authorities and amplified those allegations through media reports, thereby damaging its business reputation.
However, Chemonics argued that the earlier settlement extinguished the claims and barred Zenith from reviving them under any legal framework.
Why court dismissed suit
According to the the copy of the judgement seen by PREMIUM TIMES, Ms Alikhan said she agreed with Chemonics because Zenith Carex’s claims arose directly from the same factual background that the parties had already addressed in the 2022 agreement.
The court found that the defamation allegations and related tort claims stemmed from the underlying subcontract performance issues, particularly the earlier allegations of overbilling and fraud.
The judge ruled that the settlement agreement extended beyond contractual disputes and expressly covered tort claims, including defamation, injurious falsehood, and interference with business relations.
She further held that parties may waive even unknown or future claims where the agreement clearly shows that intention.
The court also rejected Zenith’s argument that the settlement lacked consideration or could not bar future claims, describing the agreement as a valid and binding contract supported by mutual obligations, including the withdrawal of claims and negotiated concessions.
U.S. DOJ $3.1m settlement over Nigeria-linked contract forms backdrop
The ruling follows a separate settlement that Chemonics International reached with the United States Department of Justice in December 2024, under which the company agreed to pay approximately $3.1 million to resolve civil allegations under the False Claims Act.
In a statement it shared with PREMIUM TIMES in February, the U.S. Department of Justice said the case involved allegations that Chemonics submitted inflated charges to USAID under a global health supply chain contract covering operations in Nigeria and other countries.
Under the contract, which is known as the Global Health Supply Chain, Chemonics relied on subcontractors, including Zenith Carex, to deliver medical commodities across multiple jurisdictions.
The DOJ alleged that between June 2017 and March 2020, Zenith Carex overbilled Chemonics by using inflated pricing models, including charging for long-haul deliveries based on truck tonnage rather than agreed per-kilogram rates and overcharging for last-mile delivery services beyond contractual limits.
It added that Chemonics failed to detect the discrepancies for more than two years due to weak internal controls, including inadequate monitoring systems, oversight failures, and gaps in staff training.
A senior U.S. Justice Department official, Brian Boynton, described contractor oversight as a critical responsibility and stressed that government contractors must ensure strict compliance by subcontractors.
Chemonics disclosed the issue in 2020, cooperated with investigators, and implemented corrective measures, including strengthening oversight mechanisms, reviewing billing practices, and terminating an employee linked to the invoices.
The statement clarified that the settlement did not constitute an admission of liability.
Parallel litigation involving the Global Fund
In a related but separate development in Nigeria, the Global Fund to Fight AIDS, Tuberculosis, and Malaria, which is one of the companies working with USAID, has been challenging proceedings before the High Court of the Federal Capital Territory (FCT), Abuja, in suit number FCT/HC/CV/191/2024 over jurisdiction.
It filed a preliminary objection and urged the court to set aside the service of court processes because the writ of summons and originating processes were improperly served outside Nigeria’s jurisdiction.
Zenith Carex International Limited and Adelana Olamilekan filed the suit against the company and joined Premium Times Services Ltd as the second defendant.
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The Global Fund argued that the claimants sent the court documents by courier directly to its headquarters in Geneva, Switzerland, without following proper international service procedures.
It maintained that the FCT High Court Rules require parties to route service outside jurisdiction through diplomatic channels, translate the documents into the official language of the destination country, and transmit them through the Office of the Solicitor General of the Federation.
The organisation added that the claimants failed to meet these requirements and did not obtain a court order authorising the courier service.
In supporting its application, the company filed an affidavit and submitted a Swiss legal memorandum prepared by international law firm LALIVE SA.
The legal opinion stated that Switzerland has no bilateral agreement with Nigeria governing the service of court processes and requires parties to transmit all foreign judicial documents through diplomatic channels under international legal frameworks, including the 1954 Hague Convention on Civil Procedure.
The memorandum warned that Swiss law prohibits direct service by courier or informal delivery methods, particularly for international organisations based in Geneva.
It added that improper service may render any resulting judgment unenforceable in Switzerland and may amount to a breach of Swiss sovereignty.
The Global Fund has urged the court to strike out the suit for lack of jurisdiction, describing the service of originating processes as fundamentally defective. The court is expected to rule on the preliminary objection before it proceeds to the substantive hearing.
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