The Federal Government of Nigeria has secured a victory in a London court on Monday, as the court quashed the $11 billion arbitration award in favour of Process & Industrial Developments (P&ID) Limited, a British Virgin Islands-based company.
The court ruled that the gas processing contract that P&ID signed with Nigeria in 2010 was obtained by fraud and therefore invalid. The judgment was delivered by Robin Knowles, the Justice of the Commercial Courts of England and Wales, via e-mail.
The case had been dragging on for five years, as P&ID claimed that Nigeria breached the terms of the contract, which was to build a gas processing plant in Calabar, Cross River State. The company said that Nigeria failed to supply gas to the plant, thereby causing it to lose profits.
P&ID had obtained an arbitral award against Nigeria in 2017, ordering the country to pay $6.6 billion as damages, as well as pre-and post-judgment interest at seven per cent. The award had risen to $11 billion due to interests.
However, Nigeria challenged the award, arguing that the contract was a scam designed to defraud the country. The Nigerian government presented evidence that P&ID officials paid bribes to secure the contract and that they lied about their capacity and experience.
In September 2020, Ross Cranston, a judge of the Business and Property Courts of England and Wales, granted Nigeria an extension of time and relief from sanctions, allowing the case to return to arbitration.
In March 2021, Nigeria presented its case at a trial in London, where it alleged that P&ID was involved in dishonest practices that included bribery and perjury. P&ID denied the allegations and accused Nigeria of “false allegations and wild conspiracy theories”.
On Monday, the court upheld Nigeria’s prayer and set aside the arbitration award in favour of P&ID. The court also ordered P&ID to pay Nigeria’s legal costs.
The ruling was welcomed by the Nigerian government, which said it was a “resounding victory” for the country and its people. The government also said it would continue to pursue criminal charges against those involved in the fraudulent contract.
Meanwhile, the federal government, alongside its partners has begun the deployment of tiny tankers for the transportation of crude oil through the creeks of the Niger Delta, following a protracted inability to fix the often-vandalised pipelines in the region.
The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, also urged the bid winners for the Nigerian Gas Flare Commercialisation Programme (NGFCP), to hasten site development.
