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Akinwande Soji-Ojo
Nigeria has won its bid to overturn a $11 billion damages suit involving Process & Industrial Developments (P&ID), a British Virgin Island-based company.
Nigeria had claimed that the collapsed gas processing deal was procured by a campaign of bribery and fraud.
Nigeria has now succeeded in halting the enforcement of the $11 billion arbitration award in favour of P&ID.
In a judgment on Monday, a UK court upheld Nigeria’s prayer on the ground that the ill-fated gas processing contract was obtained by fraud.
P&ID was awarded a 20-year contract in 2010 to construct and operate a gas processing plant.
The company dragged Nigeria to court claiming it entered into an agreement with the country to build a gas processing plant in Calabar, Cross River State, but the deal collapsed because the Nigerian government did not fulfil its end of the bargain.
The case, which lasted over five years, was concluded in a judgement delivered by e-mail by Justice Robin Knowles, the Judge of the Commercial Courts of England and Wales, which upheld Nigeria’s prayer on the ground that the ill-fated gas processing contract was obtained by fraudulent means by the company.
In the ruling, the judge quashed the $11 billion arbitration award previously given in favour of P&ID and halted the enforcement of the award by upholding Nigeria’s prayer.
A private arbitration tribunal had on January 31, 2017, ordered Nigeria to pay the sum of $6.6 billion to P&ID plus interest dating back to March 20, 2013, with a fixed interest rate at seven per cent, amounting to $1 million per day, which brought the potential payment to an accumulated $11 billion before the verdict.
Nigeria had based its argument on the grounds that P&ID had obtained the said contract fraudulently and accused the company of bribery and corruption on an “industrial scale.”. The country also alleged that key associates of P&ID suppressed evidence of corruption in the initial arbitral proceedings.
In arriving at his decision, Knowles said: “In the circumstances and for the reasons I have sought to describe and explain, Nigeria succeeds on its challenge under section 68. I have not accepted all of Nigeria’s allegations. But the awards were obtained by fraud and the awards were and the way in which they were procured was contrary to public policy.
“What happened in this case is very serious indeed, and it is important that section 68 has been available to maintain the rule of law.
“Section 68 (3) provides: ‘(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may — (a) remit the award to the tribunal, in whole or in part, for reconsideration, (b) set the award aside in whole or in part, or (c) declare the award to be of no effect, in whole or in part. The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.’
“I was asked by Lord Wolfson KC in closing that should my judgment conclude in favour of Nigeria, as it does, to leave over the question of the order the Court should make so that the parties have the opportunity to present argument once they have considered the judgment. I respect that request and will hear that argument as soon as that can be arranged.”