The Federal Government of Nigeria achieved a significant legal victory against Process & Industrial Developments (P&ID) Limited in a London court on Monday.
This judgment marks the conclusion of a five-year legal battle and a favorable outcome for Nigeria, as the court invalidated the $11 billion arbitration award that had been in favor of P&ID.
In a ruling delivered by e-mail, Robin Knowles, the Justice of the Commercial Courts of England and Wales, upheld Nigeria’s prayer on the ground that the ill-fated gas processing contract was initially obtained through fraudulent means.
The Business and Property Court in London issued this pivotal judgment in the case between the Federal Government of Nigeria and Process & Industrial Developments (P&ID) Limited.
This ruling came after the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, urged the bid winners for the Nigerian Gas Flare Commercialisation Programme (NGFCP), to hasten site development.
Meanwhile, the federal government, in collaboration with its partners, initiated the deployment of smaller tankers for the transportation of crude oil through the creeks of the Niger Delta.
This decision was made due to ongoing challenges in fixing frequently vandalized pipelines in the region.
P&ID had agreed with Nigeria in 2010 to build a gas processing plant in Calabar, Cross River State, but the company said the contract failed because the Nigerian government did not fulfill its end of the bargain.
Claiming that Nigeria had breached the contract terms, P&ID pursued a legal route and secured an arbitral award against the country.
On January 31, 2017, a tribunal ruled that Nigeria must pay P&ID $6.6 billion in damages, along with pre-and post-judgment interest at a rate of seven percent. Following this judgment, Nigeria sought an extension of time and relief from sanctions.
The application was granted by Ross Cranston, a judge of the Business and Property Courts of England and Wales, in September 2020, thereby effectively returning the case to arbitration.
Nigeria had alleged that the gas deal was a scam conceived to defraud the country.
Lawyers representing the federal government told the court that P&ID officials paid bribes to secure the contract.
But P&ID denied the allegation and accused the Nigerian government of “false allegations and wild conspiracy theories”.
In a March trial at the court, Nigeria alleged that the contract was secured through dishonest means that included bribery and perjury and that the arbitration award, which has now risen to $11 billion because of interests, should be nullified.
Kanyi Daily recalls that a commercial court in United Kingdom had ordered the release of $200 million used as a deposit in the case against Process & Industrial Development (P&ID) to the Nigerian Government.
