Nigeria has won its appeal against P&ID.
Nigeria had been mired in a legal battle with Process & Industrial Developments over a failed 2010 proposal to build a gas processing plant, for which it was awarded a $9 billion judgement, which has now been increased to $10 billion.
P&ID said Nigeria breached its contract by failing to provide gas for the power plant it intends to build for the country.
This hampered the completion of the Gas Project agreed to during previous President Umaru Yar’Adua’s administration, depriving P&ID of the potential benefits expected from 20 years of gas supply with “anticipated profits of $5 to $6 billion.”
The arbitral tribunal unanimously decided that the Federal Government had repudiated the GSPA by failure to perform its obligations under the GSPA and awarded P&ID was entitled to $6.6 billion in 2017. That fine along with interest has now risen to $11.5billion.
Former president Goodluck Jonathan government reached an out-of-tribunal agreement for the payment of $850 million and passed on disbursement to the administration of President Buhari.
Buhari balked at the idea of paying the negotiated sum, set aside the settlement agreement and challenge the enforcement of the award before the English Commercial Court. But the London court added $2.4 billion in interest making it $9bn.
The judge granted Nigeria’s request for a stay on any asset seizures while its legal challenge is pending, but ordered it to pay $200 million to the court within 60 days to ensure the stay. It also must pay some court costs to P&ID within 14 days.
The original decision on Aug. 16 converted an arbitration award held by P&ID to a legal judgment, which would allow the British Virgin Islands-based firm to try to seize international assets.
Nigeria then began investigating the company through the EFCC and found evidence of two bank transfers totalling $20,000 made by Dublin-based Industrial Consultants (International) Ltd. — part of the P&ID group of companies — to Grace Taiga, a Nigerian government lawyer who oversaw the award of the gas plant contract.
The payments, in 2017 and 2018, were made from an Industrial Consultants account at Allied Irish Banks and were purportedly for “medical costs,” Bala Sanga, the lead prosecutor, said in the interview.
Based on this new evidence, it called ‘seismic’ Nigeria filed fraud challenges against P&1D but the company has failed to respond to the charges.
“It is increasingly clear that this was a highly orchestrated scam, involving a cover-up by ministers at the highest levels of office in the previous administration,” says a spokesperson for the attorney general.
“These officials, who were entrusted to safeguard the future and assets of Nigeria, knowingly entered into the sham GSPA, and deliberately failed to defend the Federation in the ensuing arbitral proceedings,” the statement said.
The statement further said that P&ID’s lawyers have not been able to prove that it legitimately, and lawfully, secured a 20-year contract worth hundreds of millions of Naira.
“The company has yet to even demonstrate that they had the credentials in the first place to carry out such a complex arrangement, nor provide any evidence of tangible investment or land-holding.
“The award in question, which amounts to over eight times Nigeria’s national health budget, could be used for far more important, and genuine, public issues at the current time.
“Nigeria simply cannot afford to have our future threatened by a sham company that is not even capable of answering to the concrete evidence of fraud levelled against them.”
With a depleted excess crude account and low returns from even lower crude oil prices, Nigeria does not even have the capacity to pay the judgement debt.
Nigeria’s International assets, oil cargoes, P&ID were supposed to be seized, if Nigeria lost the appeal.