$11bn Judgment Debt: UK Court Orders P&ID To Pay Nigeria £20 Million Damages
/

$11bn Judgment Debt: UK Court Orders P&ID To Pay Nigeria £20 Million Damages

2 mins read

A United Kingdom Court has mandated Process & Industrial Developments (P&ID) Limited to pay Nigeria £20 million as damages and compensation in the next 28 days following Nigeria’s victory in an $11 billion judgment debt which was heard in October.

The award of the £20 million as damages was disclosed during a consequential ruling on the matter that took place in London on Friday to find out what next after the October ruling.

In a hearing to determine whether P&ID would get the permission to appeal the case, the court refused to grant P&ID leave to take the matter back to arbitration, saying that the company’s conduct during the process was reprehensible and therefore it completely set aside the $11 billion judgment.

It all started on the 11th of January, 2010 when P&ID Ltd signed a gas supply and processing agreement (GSPA) with Nigeria to develop a processing plant in Calabar, Cross River state. The GSPA collapsed on 22nd of August as P&ID failed to do any work, accusing the Nigerian government of not fulfilling its end of the bargain.

As a result, the company resorted to legal action against Nigeria at the London Court of International Arbitration, seeking US$5.96 billion as compensation for breach of the contract both parties entered towards the building of the gas plant. On 31st of January, 2017, the tribunal issued a ruling requiring Nigeria to compensate P&ID with $6.6 billion in damages, in addition to both pre and post-judgement interest rate of seven per cent.

READ ALSO  Why CBN's 22.75% MPR Hike Can't Tame Inflation - CCPE

On the 28th of January, 2018: Abubakar Malami, then Nigeria’s attorney-general, got directed by President Muhammadu Buhari to investigate the GSPA. On the 16th of August, 2019: Justice Butcher of the UK commercial court says he would grant P&ID the right to seize Nigeria’s assets, effectively converting the arbitration award to an enforceable judgement. Nigeria decides to appeal.

Three years after, in September 2020, a judge within the Business and Property Court of England, named Ross Cranston, granted the application Nigeria to pay the damages to P&ID.

However, lawyers representing Nigeria alleged that P&ID secured the contract to build and operate the gas processing plant through bribe. P&ID refuted this accusation, saying they “unfounded allegations and conspiracy theories.”

After three years that the UK Court ordered Nigeria to pay P&ID $6.6 billion, the interest rate raised the amount to $11 billion in 2023. On the 9th of March, 2023: Nigeria makes its final case that P&ID and its associates are guilty of bribery and corruption on an “industrial scale.” Judgement is reserved.

READ ALSO  African Development Bank approves $150 million Regional Trade Finance Unfunded Risk Participation Agreement facility for Eastern and Southern African Trade & Development Bank (TDB)

In the court trial, lawyers representing the Nigerian government prayed that the UK Court invalidate the arbitration award against Nigeria on the grounds that the gas processing contract was obtained by fraud.

Nigeria received great relief in October as the UK court set the country from its entanglement in the $11bn judgment debt previously awarded in favour of P&ID Limited. Nigeria was seeking at least £20 million back from P&ID to cover its damages and legal fees. Essentially, what P&ID lawyers were trying to do was to try and limit the amount it would pay to Nigeria as damages and they fought hard to see if it would be in naira. But the court ruled that they must pay £20 million to Nigeria and it must come in 28 days.

In the judgment delivered after five years of legal battle, Justice Robin Knowles of the Commercial Courts of England and Wales agreed that the arbitration awards “were obtained by fraud and the awards were, and the way in which they were procured, contrary to public policy.”

+ posts

Leave a Reply

Your email address will not be published.