In a courtroom in London on Monday, the Nigerian government prevailed in its legal battle with Process & Industrial Developments (P&ID) Limited. The court nullified the $11 billion arbitration ruling in favor of P&ID, bringing to an end five years of legal processes that had finally worked in Nigeria’s favor.
The Justice of the Commercial Courts of England and Wales, Robin Knowles, supported Nigeria’s claim that the doomed gas processing contract was procured through fraud in a decision sent via email.
A botched contract to build a gas processing facility resulted to a $6.6 billion arbitrary judgment against Nigeria, whose interests have now grown to $11.5 billion. The UK judge rejected the case. Judge Knowles determined that the awards were fraudulently acquired and that what had transpired in the case was contrary to public policy.
The Business and Property Court in London delivered the judgment in a case between the Federal Government of Nigeria and Process & Industrial Developments (P&ID) Limited.
This ruling came after the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, urged the bid winners for the Nigerian Gas Flare Commercialisation Programme (NGFCP), to hasten site development.
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.
P&ID had agreed with Nigeria in 2010 to build a gas processing plant in Calabar, Cross River State, but the company said the contract failed because the Nigerian government did not fulfill its end of the bargain.
Claiming Nigeria breached the terms of the contract, P&ID took a legal recourse and secured an arbitral award against the country.
On January 31, 2017, a tribunal ruled that Nigeria should pay P&ID $6.6 billion as damages and pre- and post-judgment interest at seven per cent. Following the judgment, Nigeria applied for an extension of time and relief from sanctions.
The application was granted by Ross Cranston, a judge of the Business and Property Courts of England and Wales, in September 2020, thereby returning the case to arbitration. Nigeria had alleged that the gas deal was a scam conceived to defraud the country. Lawyers representing the federal government told the court that P&ID officials paid bribes to secure the contract.
But P&ID denied the allegation and accused the Nigerian government of “false allegations and wild conspiracy theories”. In a March trial at the court, Nigeria alleged that the contract was secured through dishonest means that included bribery and perjury and that the arbitration award, which has now risen to $11 billion because of interests, should be quashed.
