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After a protracted legal battle, the Nigerian government won the Process & Industrial Developments (P&ID) case. Consequently, the government was relieved from paying a hefty fine of $11.5billion. The amount represents the claim of alleged failed contract agreement and interest accruing to it for the construction of a gas processing plant in Calabar, Cross River State, purportedly awarded to P&ID in 2010. Victory came Nigeria’s way recently, following the judgment of the Commercial Court of England and Wales, presided by Justice Robin Knowles that halted the enforcement of the $11billion instituted by P&ID.
The P&ID deal failed in 2012 and the company sought from the London Court of International Arbitration Tribunal an initial compensation of $5.96billion from the Nigerian government. In 2017, the Arbitration Tribunal ruled in favour of P&ID and awarded against Nigeria, the sum of $6.6billion with interest fixed at seven per cent (or $1million daily), effective from May 2013. The accumulated interest was $9.6billion, now totaling $11.5billion.
The Arbitration Tribunal had unanimously ruled that Nigeria breached the contract deal with P&ID for the Gas Supply and Processing Agreement (GSPA) that frustrated the building of the gas supply project. But in dismissing the claims by P&ID, Justice Knowles agreed with Nigeria’s legal team that the contract was obtained by fraud. According to Knowles, “in the circumstances and reasons I have sought… I have not accepted all Nigeria’s allegations, but the awards were obtained by fraud, and the way in which they were procured was contrary to public policy.” The judge also said that he would send the copy of his judgment to the Solicitors Regulatory and Bar Standards Board in the United Kingdom to make sure that the lawyers who acted for P&ID – and were motivated by the sheer sum of money they are going to make and nothing else – were punished. This is remarkable conduct that Nigeria’s judges should emulate in the dispensation of justice.
The judge also found that P&ID had given bribes to a Nigerian oil ministry official in connection with the gas contract and had failed to disclose this when it took Nigeria to the Arbitration Tribunal over the collapse of the contract deal. The P&ID had claimed that Nigeria violated the terms of its agreement by falling to provide gas for the power plant it wanted to build for the country which it agreed to during the administration of late President Umaru Yar’Adua, and had, therefore, been deprived of the “potential benefits expected from 20 years’ worth of gas supplies with anticipated profits of between $5 and $6billion.”
Former President Goodluck Jonathan reached an out-of- court agreement for the payment of $850 million and passed it on to his successor, President Muhammadu Buhari. But Buhari’s administration declined to pay the negotiated sum, and instead, challenged the enforcement of the award before the English Commercial Court, and filed an appeal in September 2020. Lawyers for Nigeria contended that there was a prima facie case, enough evidence that the contract and arbitration award were procured by fraud and urged the court to set the award aside.
The court granted Nigeria’s request for a stay on any asset seizure of Nigeria abroad, while the legal challenge was pending. However, the court ordered Nigeria to pay $200million to the court within 60 days. This was to ensure the stay of execution in favour of P&ID. It took the diligent collaboration of the EFCC, the DSS, the Police, and the Nigerian Intelligence Unit to discover evidence of bank transfer of bribe money in the name Nigerian consultant for an ancillary company owned by P&ID domiciled in Dublin, Ireland.
Although this is not entirely the end of the case, as the UK court will still hold further hearing in the weeks ahead to determine costs payable by P&ID and others, the judgment is a huge relief to the government. Nonetheless, it is trite principle of arbitration that where fraud is established (as is the case in this matter), it is a sufficient ground for setting it aside on appeal. Commendation goes to government’s legal team assembled by the Buhari government.
Going forward, the P&ID case should serve as an eye-opener for Nigeria. Henceforth, government should ensure sufficient coordination of all international and local agreements to ensure that this kind of embarrassment does not happen again. The government should make sure that those found culpable in this case are brought to book. This is the best way to show that the war against corruption is still on course.
There is no doubt that the judgment is a victory for Nigeria. The judiciary can also learn one or two lessons from it. Above all, the judgment clearly shows that the British justice system works. Nigeria has been saved from the fraudulent case.
