Nigeria has effectively invalidated an $11 billion arbitration award that had favored Process & Industrial Developments (P&ID).
The judgment, concluding more than five years of intense legal disputes between the Nigerian government and the company, was delivered via email by Justice Robin Knowles of the Commercial Courts of England and Wales on Monday, October 23, 2023.
This triumph followed Nigeria’s contention that the gas processing contract, which resulted in the arbitration award, had been secured through fraudulent methods.
The ill-fated Gas Supply and Processing Agreement (GSPA) was inked on January 11, 2010, between Process and Industrial Developments (P&ID) Ltd and Nigeria, with the aim of establishing a processing facility in Calabar, Cross Rivers state. However, the contract unraveled on August 22, 2012, as P&ID failed to meet its obligations, leading to private arbitration proceedings.
The arbitration tribunal, on July 17, 2015, determined that Nigeria had breached the contract, resulting in an order on January 31, 2017, mandating Nigeria to make a payment of approximately $6.6 billion to P&ID, along with interest accruing at a rate of 7% from March 20, 2013. The potential payment had ballooned to over $11 billion due to the accumulating interest of $1 million per day.
In June 2018, President Muhammadu Buhari took a resolute step by instructing then-Attorney General Abubakar Malami to investigate the GSPA.
In the face of challenges, Nigeria’s resolve remained unwavering, resulting in significant developments, including the conviction of P&ID and P&ID Nigeria on charges related to fraud and money laundering by the Economic and Financial Crimes Commission (EFCC).
In August 2019, Justice Butcher of the UK commercial court granted P&ID the authority to seize Nigeria’s assets, effectively transforming the arbitration award into an enforceable judgment. However, Nigeria appealed this ruling.
Nigeria’s battle gained momentum when, on September 4, 2020, the English court permitted the country to contest the arbitration award. Justice Cranston acknowledged the presence of a prima facie case of fraud and recognized Nigeria’s diligent efforts to investigate the alleged wrongdoing.
The case reached a pivotal moment on January 23, 2023, when Justice Robin Knowles heard Nigeria’s formal application to nullify the arbitration award.
Nigeria put forth a strong case, contending that P&ID and its affiliates were implicated in acts of bribery and corruption in the matter “industrial scale.” The verdict was withheld until this day.