In a judgment Monday, Justice Robin Knowles of the Commercial Courts of England and Wales ruled in favour of Nigeria in the enforcement of the $11bn P&ID arbitration awards as he upheld Nigeria’s prayer on the ground that the ill-fated gas processing contract was procured by a campaign of bribery and fraud.
With the judgement handed down physically in open court, and electronically by email to the parties on Monday, Nigeria succeeded in stopping the enforcement of the awards which was initially in favour of P&ID.
“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,” Justice Knowles ruled.
Furthermore, the judge said, “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.
576. 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.”
P&ID was awarded a 20-year contract in 2010 to construct and operate a gas processing plant.
Upon the failure of the deal, the little-known British Virgin Islands-based company took Nigeria to arbitration over the deal.
In January 2017, a private arbitration tribunal ordered Nigeria to pay $6.6 billion to P&ID with interest starting in March 2013.
Before the verdict, the interest fixed at seven percent ($1 million daily) had accumulated to over $11 billion.
With the London ruling, Nigeria has now succeeded in halting the enforcement of the controversial $11 billion arbitration award in favour of P&ID.
Here are the timeline leading to Monday’s Nigeria victory in London:
2010 – Nigeria entered an agreement with Process & Industrial Development (P&ID) Ltd to build a gas processing plant in Calabar.
Years later, the company claimed the deal collapsed because Nigeria failed to fulfil its end of the bargain.
Meanwhile, Nigeria claimed the deal was a SCAM to defraud the country and officials of P&ID paid bribes to get that deal from the government.
2017 – A tribunal ruled that Nigeria should pay $6.6 billion (about N5 trillion) with 7 percent pre- and post-judgment interest. The amount that would have wrought a wreck on the country.
2020 – Nigeria applied for an extension and relief of sanctions.
2023 – Some months ago, some P&ID officials tried to pile pressure on President Bola Tinubu for an out-of-court settlement. But President Tinubu believed Nigeria would win, so he refused that option and went ahead with the court case.
October 2023 – Nigeria WINS
Source: PM Express
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