info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
Image from North Africa Post
Nigeria no longer has to pay a multibillion-dollar fine over a failed gas project agreement with Process & Industrial Developments Ltd (P&ID), after a London High Court has ruled in favor of Abuja and its appeal over damages, thus bringing an end to the $11 billion lawsuit filed by P&ID against the federal government.
An English judge has ruled earlier this week that the offshore P&ID company wielded bribery and perjury to secure a fraudulent $11.5bn arbitration award. The landmark ruling follows a decade of high-stakes litigation opposing the West African state to the small offshore company.
The legal case has its roots in a 2010 deal between Nigeria’s petroleum ministry and P&ID to operate a plant designed for converting natural gas into electricity. Nigeria, however, failed to construct the necessary pipeline to supply the gas, prompting P&ID to trigger arbitration proceedings two years later, claiming a breach of contract and purportedly lost revenues due to the agreement’s failure to materialize.
A UK tribunal issued an award in 2015, declaring Nigeria was liable to damages and in a final award in 2017 quantified those damages at $6.6 billion. Over the years, the award had grown to $11 billion due to accrued interest.
In the appeal, Nigeria alleged bribery and corruption by the company before, at and after the time the two sides entered into the agreement. “I have not accepted all of Nigeria’s allegations,” Justice Robin Knowles concluded in the ruling by the Commercial Court. “But the Awards were obtained by fraud and the way the awards were procured was contrary to public policy.” Judge Robin Knowles found that P&ID had paid bribes to a Nigerian oil ministry official in connection with the gas contract signed in 2010, and had failed to disclose this when it later took Nigeria to arbitration over the collapse of the deal.
Defeat would have meant Nigeria owed over $11 billion to P&ID, representing 10 times the country’s 2019 health budget.
Nigeria’s Justice Ministry has called P&ID a vulture fund-backed shell company. Nigerian President Bola Tinubu hailed the ruling as a “landmark” warning against “economic conspiracies between private firms and solitarily corrupt officials who conspire to extort and indebt the very nations they swear to defend and protect.” It is a blow against economic malpractice and the exploitation of Africa, he said.
