$11bn Judgement: Nigeria Wins Again As London Court Denies P&ID’s Appeal

Process and Industrial Development (P&ID) has lost its final appeal against Nigeria in an eleven-billion-dollar arbitration case.

The P&ID sought to overturn an October judgement by a London High Court that halted enforcement for damages over a failed gas processing project.

The High Court had earlier ruled in October that the British Virgin Islands-based company paid bribes to a Nigerian oil ministry official in connection with the gas contract signed in 2010 and failed to disclose this when it took Nigeria to arbitration over the collapse of the deal.

In his ruling, Judge Robin Knowles rejected P&ID’s argument that the case should be returned for arbitration and affirmed that the damages award should be thrown out completely.

Judge Knowles had on October 23 ruled in favour of Nigeria in the enforcement of a $11 billion Process & Industrial Developments (P&ID) Limited arbitration award.

The judge claimed that the company obtained the award against Nigeria through fraud.

The judge had found out that P&ID paid bribes to Nigerian officials who were part of the drafting of the gas supply and processing agreement in 2010.

Also discovered by the judge was that P&ID was illegally in possession of Nigeria’s privileged legal documents during the arbitration hearings.

Nigeria had urged the court to set the award aside, saying that some individuals in the case were being tried for money laundering and graft.

But after listening to the arguments by lawyers to P&ID, which included that the documents found in their possession played no role in its initial victory at the arbitration, the judge on Thursday refused to grant permission to appeal.

P&ID cannot apply for permission from the Court of Appeal.

In January 2010, P&ID, a Virgin Islands-registered company founded by two Irish business partners, signed a Gas Supply and Processing Agreement (GSPA) with Nigeria to develop a processing plant in Calabar, the Cross River State capital but the deal failed in August 2012 and the company sought $5.96 billion in compensation from Nigeria with arbitration proceedings against the country at the London Court of International Arbitration.

In January 2017, the arbitration said Nigeria breached the contract and ordered the country to pay the company $6.6 billion with interest starting in May 2013. Before the verdict, the interest fixed at seven percent ($1 million daily) had accumulated to over $11 billion.

Subsequently, Nigeria filed an appeal against the enforcement of the award and the court granted the relief sought by the country in September 2020. The Nigerian side argued that there was enough evidence that the contract and the arbitration award were procured by fraud.

The Nigerian side thereby urged the court to set the award aside, saying that some individuals in the case were being tried for money laundering and graft.

In his October ruling, the judge not only agreed that the arbitration awards were obtained by fraud but also that the manner in which they were procured was contrary to public policy.


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