THIRTY Three Nigerian properties in the UK have been earmarked and face the risk of being confiscated under the terms of a messy legal suit involving damage costs awarded to energy firm Eurafic Power by the London Court of International Arbitration.
Renown for reneging on agreed contracts, the Nigerian government is notorious for scrapping signed agreements, especially when there is a regime change. In one recent instance, the government reneged on an agreement with Eurafic Power and the company subsequently took the matter to the Court of International Arbitration, where it secured a judgement in its favour.
This judgement was subsequently endorsed by a UK High Court, making Nigeria liable. In its judgement, the a UK high court ordered the payment of $2.51m, £225, 949.19 and N57.9m, representing a combined sum of N1.12bn based on the current Central Bank of Nigeria’s exchange rate.
According to documents made available in court, the legal tussle emanated from a contract entered into by the Nigerian Government and Eurafric Power in February 2013. Under the terms of the deal, the firm entered into a share-sale agreement with the Bureau of Public Enterprise and the Federal Ministry of Finance, both acting on behalf of the Nigerian government.
This deal involved the purchase of Sapele Power, the owners of Sapele Power Station at the cost of $201m, including material properties and core assets of the company. Pursuant to the share sale agreement, the National Council on Privatisation issued Share Certificate 0001 to Eurafric Power on February 10, 2014, approving the sale of the federal government’s equity in Sapele Power.
A Certificate of Handover with number 0002 also showed the handover of Sapele Power to Eurafric Power. All assets, liabilities, employees, rights and obligations of the Power Holding Company of Nigeria were also handed to Sapele Power, now owned by Eurafric Power.
However, trouble started when after the handover had been completed, the Nigerian government and the Niger Delta Power Holding Company began arrangements to transfer a substantial portion of the premises already sold to Eurafric Power to one Ogorode Power Generation Company. The government insisted that the portion it transferred did not form part of the sold assets.
Subsequently, Eurafric Power commenced arbitration against the Nigerian government in the UK in line with the agreement signed by the parties. A tribunal was set up comprising a former attorney-general of Pakistan Makhdoom Ali Khan, serving as its as chairman, with a retired Nigerian Supreme Court judge, Justice Samson Uwaifo, and a former attorney-general of the federation, Chief Bayo Ojo, both named as co-arbitrators.
On September 28, 2017, the arbitral tribunal ruled in favour of Eurafric Power. A UK high court presided over by Justice Popple Well subsequently recognised the award as a court judgment.
In its judgement, the court stated that the defendants had 30 days to appeal after, which the claimants would be free to enforce the judgment. In a letter addressed to attorney-general of the federation, Abubakar Malami, dated October 23, 2019, Eurafric Power called on the Nigerian government to honour the court judgment and pay immediately.
Signed by its lawyer, Godwin Obla, the firm stated that it had identified 33 of Nigeria’s properties in the UK, which were not being used for diplomatic purposes, adding that it would liquidate some of the assets soon. The letter reads in part: “In our view, the identification of the 33 properties by the foreign counsel may pose a significant risk to the interest of the Federal Government of Nigeria if or when the report is tendered before the UK court at which stage it becomes a public document and accessible to any member of the public.
“As it is now common knowledge, in the wake of the global publicity attracted by the P&ID case, Nigerian assets abroad now stand the increased risk of seizure/forfeiture for the liquidation of judgment debts. In our opinion, therefore, it will not augur well for potentially hostile interests to gain access to actionable information of the Federal Government of Nigeria’s assets in the UK such as are contained in the report of the foreign counsel.”