Nigeria has won its bid to overturn an $11 billion damages bill involving the controversial Process & Industrial Developments (P&ID) deal.
The Business and Property Court in London today ruled in favour of Nigeria in a $11 billion suit between the federal government of Nigeria and Process & Industrial Developments (P&ID) Ltd. The judgment was delivered by Judge Robin Knowles.
The UK court upheld Nigeria’s prayer on the ground that the ill-fated gas processing contract was obtained by fraud.
The judgment had initially been secured by briefcase company, Process & Industry Development (P&ID) Ltd, in relation to an unsuccessful 2010 agreement to construct a gas processing facility.
On January 31, 2017, a private arbitration tribunal directed Nigeria to make a substantial payment of $6.6 billion to P&ID, in addition to accrued interest dating back to March 20, 2013.
Given the fixed interest rate of seven per cent, equating to $1 million per day, the potential payment had ballooned to over $11 billion prior to the court’s decision.
Nigeria claims that the collapsed gas processing project was procured by a campaign of bribery and fraud.
Nigeria has now succeeded in halting the enforcement of the $11 billion arbitration award in favour of P&ID.
In a judgment Monday, a UK court upheld Nigeria’s prayer on the ground that the ill-fated gas processing contract was obtained by fraud.
Process & Industrial Developments (P&ID) was awarded a 20-year contract in 2010 to construct and operate a gas processing plant.
Upon the failure of the deal, the little-known British Virgin Islands-based company took Nigeria to arbitration over the deal.
CLICK TO READ FULL TEXT OF THE JUDGMENT HERE… Nigeria v P&ID judgment
The FULL STORY…
A UK Judge has dismissed the $6.6billion arbitrary judgment against Nigeria of which interests has ballooned to $11.5billion, won by briefcase company Process & Industry Development (P&ID) Ltd, over a failed 2010 deal to develop a gas processing plant.
Judge Robin Knowles of the Business and Property Court in London court which sat remotely and behind closed doors, ruled that the award were obtained by fraud and what has happened in the case is contrary to public policy.
Nigeria had been embroiled in a fight with Process & Industrial Developments over a failed 2010 deal to develop a gas processing plant over which it was inflicted a $9bn judgment which has now risen to $10bn.
P&ID claimed Nigeria violated terms of its agreement by failing to provide gas for the power plant it wants to build for the country.
This frustrated the construction of the Gas Project agreed to during the government of former president Umaru Yar’Adua and deprived P&ID the potential benefits expected from 20 years’ worth of gas supplies with “anticipated profits of $5 to $6 billion.”
The arbitral tribunal unanimously decided that the Federal Government had repudiated the GSPA by failure to perform its obligations under the GSPA and awarded P&ID was entitled to $6.6 billion in 2017. That fine along with interest has now risen to $11.5billion.
Former president Goodluck Jonathan government reached an out-of-tribunal agreement for the payment of $850 million and passed on disbursement to the administration of President Buhari.
Buhari balked at the idea of paying the negotiated sum, set aside the settlement agreement and challenge the enforcement of the award before the English Commercial Court. But the London court added $2.4 billion in interest making it $9bn.
The judge granted Nigeria’s request for a stay on any asset seizures while its legal challenge is pending, but ordered it to pay $200 million to the court within 60 days to ensure the stay. It also must pay some court costs to P&ID within 14 days.
The original decision on Aug. 16 converted an arbitration award held by P&ID to a legal judgment, which would allow the British Virgin Islands-based firm to try to seize international assets.
Nigeria then began investigating the company through the EFCC and found evidence of two bank transfers totalling $20,000 made by Dublin-based Industrial Consultants (International) Ltd. — part of the P&ID group of companies — to Grace Taiga, a Nigerian government lawyer who oversaw the award of the gas plant contract.
The payments, in 2017 and 2018, were made from an Industrial Consultants account at Allied Irish Banks and were purportedly for “medical costs,” Bala Sanga, the lead prosecutor, said in the interview.
Based on this new evidence, it called ‘seismic’ Nigeria filed fraud challenges against P&1D but the company has failed to respond to the charges.
“It is increasingly clear that this was a highly orchestrated scam, involving a cover-up by ministers at the highest levels of office in the previous administration,” says a spokesperson for the attorney general.
“These officials, who were entrusted to safeguard the future and assets of Nigeria, knowingly entered into the sham GSPA, and deliberately failed to defend the Federation in the ensuing arbitral proceedings,” the statement said.
The statement further said that P&ID’s lawyers have not been able to prove that it legitimately, and lawfully, secured a 20-year contract worth hundreds of millions of Naira.
“The company has yet to even demonstrate that they had the credentials in the first place to carry out such a complex arrangement, nor provide any evidence of tangible investment or land-holding.
The award in question, which amounts to over eight times Nigeria’s national health budget, could be used for far more important, and genuine, public issues at the current time.
Nigeria simply cannot afford to have our future threatened by a sham company that is not even capable of answering to the concrete evidence of fraud levelled against them.”
With a depleted excess crude account and low returns from even lower crude oil prices, Nigeria does not even have the capacity to pay the judgement debt.
Nigeria’s International assets, oil cargoes, P&ID were supposed to be seized, if Nigeria lost the appeal.