UK court declares P&ID contract fraudulent, exempts Nigeria of $11bn arbitration award
The Federal Government can heave a sigh of relief as a London court in the United Kingdom has declared the famed Process & Industrial Developments (P&ID) Limited contract hanging over the country’s head as fraudulent, exempting Nigeria from $11billion liabilities incurred.
A private arbitration tribunal had on January 31, 2017 ordered Nigeria to pay $6.6 billion to P&ID plus interest beginning from March 20, 2013.
With the interest rate fixed at seven percent amounting to $1 million a day, the potential payment had accumulated to over $11 billion before the verdict.
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 Nigeria breached the terms of the contract, P&ID took a legal recourse and secured an arbitral award against the country.
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 quashed.
In a ruling delivered electronically on Monday, 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 obtained by fraud.
The UK judge dismissed the $6.6 billion arbitrary judgment against Nigeria of which interests have increased to $11.5 billion over a failed contract to develop a gas processing plant.
Judge Knowles ruled that the awards were obtained by fraud and that what had transpired in the case were contrary to public policy.
The Business and Property Court in London delivered the judgment in a case between the Federal Government of Nigeria and Process & Industrial Developments (P&ID) Limited.
In making 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 arguments once they have considered the judgment. I respect that request and will hear that argument as soon as that can be arranged.”
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, alongside its partners has begun the deployment of tiny tankers for the transportation of crude oil through the creeks of the Niger Delta, following a protracted inability to fix the often-vandalised pipelines in the region.
