NIGERIA has secured a landmark victory in its pursuit 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, Process and Industrial Developments 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.
According to the UK Tribunal ruling, the agreement was executed on January 11, 2010, by Process and Industrial Development and Nigeria’s ministry of petroleum resources for and on behalf of the Federal Government of Nigeria to refine associated natural gas, also known as wet gas, into non-associated natural gas to be used in powering Nigeria’s national electric grid. Under the agreement, the Process and Industrial Development project would have generated 3,000 megawatts of electricity for Nigeria.
However, the Nigerian government has successfully appealed the judgement. Delivering his judgement in favour of Nigeria yesterday, Justice Ross Cranston, a judge of the Business and Property Courts of England and Wales, granted Nigeria’s application for an extension of time and relief from sanctions.
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 percent. The current outstanding amount is estimated at $10 billion.
Nigeria’s federal government had approached the court to establish that the contract was awarded on illegal terms with lawyers telling the court in July that P&ID officials paid bribes to get the contract. P&ID reportedly entered a gas supply and processing agreement with Nigeria in 2010.
As part of the fightback, on August 18 this year, the Economic and Financial Crimes Commission arraigned James Nolan, a Briton, and six companies over their alleged involvement in the contract. Nigeria has been making moves to overturn the judgement and has gotten court clearance to request documents from a P&ID stakeholder and review the bank statements of ex-President Goodluck Jonathan, Diezani Alison-Madueke and Rilwanu Lukman, former ministers of petroleum.