NIGERIA has secured another major victory in its quest to overturn a $10bn judgement awarded against the government for breach of contract filed against it by British company Process and Industrial Developments (P&ID).
Claiming it lost money due to the actions of the federal government, P&ID initiated moves to recover a judgment debt of $6.6bn in damages plus $2.3bn in uncollected interest from the Nigerian government. This is calculated at $1.2m a day and according to a lead judgment by the London Arbitration Tribunal led by Lord Hoffmann, Nigeria has a case to answer.
On January 31, 2017, a tribunal had ruled that Nigeria should pay P&ID $6.6bn as damages, as well as pre- and post-judgment interest at 7% adding to a total of $10bn. However, Nigeria has since been fighting the judgement and today secured a major victory when a London Commercial Court ordered the release of the $200m guarantee put in place as security for the stay of execution granted Nigeria for the appeal filed against the judgment of Justice Butcher earlier on in the case.
P&ID had sought to increase the security to $400m but the court presided over by Sir Ross Cranston rejected the request and ordered costs of £70,000 against the company. Earlier this month, the court had granted another cost of £1.5m costs against P&ID as the case appears to be gradually swinging in Nigeria’s favour.
Central Bank of Nigeria governor Godwin Emefiele, said: “Due to the substantial evidence of prima facie fraud established before the court, we are pleased that the judge has agreed to release the guarantee. We are also pleased that the court has rejected P&ID’s application to increase the guarantee, which was clearly intended to be a diversionary tactic and entirely misconceived.
“This release which is an accretion into the reserves will further enhance the nation’s management of the exchange rate of its domestic currency, the naira. This is a further and significant victory for Nigeria in our ongoing fight to overturn the $10bn award procured through fraud and corruption by P&ID and former government officials.
“P&ID and its backers, Lismore Capital and VR Advisory, are increasingly seeing their case slip between their fingers. They continue to resort to employing delay tactics, disseminating misleading claims and taking every step to obstruct our investigations across multiple jurisdictions.
“The Federal Republic of Nigeria will not rest until we secure justice for the people of Nigeria no matter how long it takes. Investigations are ongoing and we are confident that more of the truth will be revealed over the coming months.”
PI&D, based in the British Virgin Islands set up solely to build a gas processing plant in Nigeria, won a $6.6bn arbitration award after the 2010 deal collapsed. However, Nigeria successfully sought the right to appeal an August ruling that would have converted the arbitration award to a judgment, which would make it easier for P&ID to seize its assets.