A United States court has granted the Nigerian government permission to request documents from VR Capital Group Limited, the part-owner of Process & Industrial Developments (P& ID) Limited, a company that received a $9.8 billion arbitration award the federal government is trying to overturn.
Bloomberg reported that the United States’ District Judge, Mr. Paul Engelmayer, ordered in New York that Nigeria could subpoena information from London-based hedge fund VR Capital, four subsidiaries and three of its directors.
The Economic and Financial Crimes Commission (EFCC) plans to use the data in its probe of British Virgin Islands-registered P& ID Limited and alleged corrupt government officials.
A Cayman Islands-registered unit of VR Capital acquired a 25 per cent interest in P&ID about two years ago and would have conducted due diligence on the firm that is “highly relevant” to the ongoing investigation, according to a court filing submitted by Nigeria’s Attorney General and Minister of Justice, Mr. Abubakar Malami on May 12.
The successful court application is part of Nigeria’s efforts to show that a 2010 gas-supply contract with P&ID was a sham designed to fail by the company and government officials.
Nigeria wants VR Capital to hand over documents concerning the company’s purchase of P&ID shares as well as the contract and arbitration proceedings, according to court filings.
EFCC said its investigations showed that P&ID acknowledged destroying records “in or around January 2017” and VR Capital is “a logical source” for recovering such information, according to the filing by Malami.
VR Capital could still seek to quash the subpoena. Malami’s spokesman declined to comment. Questions sent to VR Capital by Bloomberg were referred to a spokesman for P&ID.
Nigeria’s “efforts to seek information on a crime that never occurred from a party that was never involved with P&ID until years after the alleged events is prima facie evidence that it has no case at all,” London-based iNHouse Communications, representing P&ID, said by email.
“The claim that P&ID deliberately concealed documents by destroying them is totally false.”
VR Capital, which has offices in New York, London and Moscow, is an asset manager that focuses on distressed securities and “event-driven/special situations investments,” according to its website.
But Malami described the firm as a “vulture fund” in December in a statement to a UK court.
P&ID has denied any wrongdoing, saying the Federal Government of Nigeria invented the allegations to evade its legal obligations.
The dispute between the federal government and P&ID became a crisis for Africa’s biggest oil producer in August, when a UK judge ruled P&ID could enforce a 2017 arbitration tribunal’s decision that Nigeria breached the gas-supply contract.
The resulting award now totals $9.8 billion including interest and is equivalent to about 30 per cent of the country’s foreign reserves.
An investigation by EFCC has already resulted in criminal charges in Nigeria and would form the basis of the government’s appeal against the ruling.
The contract and arbitration award are P&ID’s “sole assets,” according to Nigeria’s filings to the District Court for the Southern District of New York. The company was supposed to build a gas-processing plant, while the government was to supply the raw material. “The only thing P&ID engineered was a fraudulent arbitration claim,” the federal government alleged.
