In a momentous legal triumph for the Federal Government of Nigeria, a London court has ruled in favor of Nigeria, overturning an $11 billion arbitration award previously granted to Process & Industrial Developments (P&ID) Limited.
The judgment, delivered by email, comes after five years of intricate legal proceedings and underscores the victory for Nigeria in the protracted case.
Robin Knowles, the Justice of the Commercial Courts of England and Wales, presided over the case and upheld Nigeria’s claims that the gas processing contract with P&ID had been procured through fraudulent means.
The ruling was made in the Business and Property Court in London, and it marks the culmination of a fierce legal battle between the Federal Government of Nigeria and P&ID Limited. This outcome is a significant milestone in the ongoing dispute.
The origins of this legal saga date back to 2010 when P&ID entered into an agreement with Nigeria to construct a gas processing plant in Calabar, Cross River State. However, the project never materialized, with P&ID asserting that Nigeria had failed to meet its obligations under the contract.
Consequently, P&ID initiated legal proceedings against Nigeria, ultimately securing an arbitral award against the country. On January 31, 2017, a tribunal ruled that Nigeria should pay P&ID $6.6 billion in damages, in addition to pre- and post-judgment interest at seven percent.
Nigeria subsequently applied for an extension of time and relief from sanctions. This application was granted by Ross Cranston, a judge of the Business and Property Courts of England and Wales, in September 2020, leading to the case returning to arbitration.
Throughout the legal battle, Nigeria consistently maintained that the gas deal had been a fraudulent scheme designed to defraud the nation. The legal team representing the federal government asserted that P&ID officials had engaged in bribery to secure the contract.
In contrast, P&ID vehemently denied these allegations, labeling them as “false allegations and wild conspiracy theories.”
In a pivotal March trial, Nigeria presented compelling evidence to support its claim that the gas contract had been obtained through dishonest means, including bribery and perjury. Nigeria argued that the arbitration award, which had swelled to $11 billion due to accrued interest, should be annulled.
This landmark judgment in favor of Nigeria has not only vindicated the nation but also marked a significant turning point in the P&ID case, bringing relief to the Nigerian government, its citizens, and the economy.
It is expected that this decision will have far-reaching implications for international business contracts and the protection of national interests.
In related developments, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, urged the winners of the Nigerian Gas Flare Commercialisation Programme (NGFCP) to expedite site development.
Meanwhile, the federal government, in collaboration with its partners, has initiated the use of small tankers for transporting crude oil through the creeks of the Niger Delta due to continued difficulties in repairing vandalized pipelines in the region.