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P&ID Case: Victory for Nigeria as UK Court grants extension of time

Nigeria has secured a landmark victory in its pursuit to overturn a $10 billion judgement awarded against it in a case against Process and Industrial Developments Limited (P&ID).

A judge of the Business and Property Courts of England and Wales, Ross Cranston, granted Nigeria’s application for an extension of time and relief from sanctions.

The English Commercial Court today delivered an unprecedented judgment allowing the Federal Republic of Nigeria, FRN, permission to proceed with its challenge to the $10 billion arbitral award made against it over three years ago.

The Court has allowed the FRN to bring this challenge well outside the normal time limits due to the exceptional circumstances where the FRN has uncovered evidence of a massive fraud in procuring the award.

The Court heard evidence from the FRN and the offshore shell company P&ID in relation to the gas supply and processing agreement (GSPA) which the parties entered into 10 years ago and which was never performed.

The Buhari Administration, having inherited this dispute from the previous administration, only recently uncovered evidence that the GSPA was a sham commercial deal designed to fail from the start, and that its subsequent arbitral award was based on fraud and corruption.

The FRN relied on a number of ongoing investigations across multiple jurisdictions, including the US, to build its case. During the hearing, new evidence was presented to further support the FRN’s challenge.

The Judge, Sir Ross Cranston, found that: “Nigeria has established a strong prima facie case that the GSPA was procured by bribes paid to insiders as part of a larger scheme to defraud Nigeria.

“It is not my function at this preliminary stage to decide whether a fraud took place,”

“However, it has been necessary to consider a considerable amount of the material to decide firstly, whether, as Nigeria contended, there is a prima facie case of fraud and how strong that case is, and secondly, the steps Nigeria took to investigate the alleged fraud from late 2015.

“Both matters are relevant to the issues of whether Nigeria’s claim is barred altogether and whether time should be extended in its favour and relief from sanctions granted,” Cranston said.

Perjured Evidence

There is also a strong prima facie case that P&ID’s main witness in the arbitration, Mr Quinn, gave perjured evidence to the Tribunal and that, contrary to that evidence, P&ID was not in the position to perform the contract.

As to the Jurisdiction and Liability stages of the arbitration, there is a prima facie case that they were tainted by the conduct of Nigeria’s advocate, Mr Shasore. … It seems to me that Nigeria has made a good case that, at the time it took part or continued to take part in the arbitration, it did not know and could not with reasonable diligence have discovered the grounds it now advances.”

This is a significant win for the FRN as well as the court systems, Cranston stated: “Not only is the integrity of the arbitration system threatened, but that of the court as well, since to enforce an award in such circumstances would implicate it in the fraudulent scheme.”

The FRN will now proceed to a full trial of the issues where the FRN’s substantive application to finally set aside the award will be heard.

The Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami, in a statement on Friday, said Nigeria got the nod of an English court to commence the process of challenging the award made against the country by an arbitral panel, which was later sanctioned by a United Kingdom court.

“The Federal Republic of Nigeria is pleased with the outcome from the High Court hearing today. This is a major victory in our ongoing fight against the vulture-fund-backed P&ID, to overturn the injustice of the multi-billion dollar arbitral award.

In light of the new and substantive evidence presented regarding P&ID’s fraudulent and corrupt activities, the Court has granted our application for an extension of time to hear our challenge out of normal time limits.

We will now proceed to a full hearing of our fraud challenge in the coming months.

Investigations into the GSPA are ongoing, and we are firmly committed to overturning the award – no matter how long it takes – to ensure that this money goes towards Nigeria’s future, not into the pockets of millionaires trying to exploit our country,” the AGF Malami stated.

On January 31, 2017, a tribunal had ruled that Nigeria should pay P&ID $6.6 billion as damages, as well as pre- and post-judgment interest at 7 per cent.

The current outstanding amount is estimated at $10 billion.

The federal government had approached the court to establish that the contract was awarded on illegal terms.

Nigeria’s lawyers told the court in July that P&ID officials paid bribes to get the contract.

P&ID reportedly entered a gas supply and processing agreement with Nigeria in 2010.

Claiming Nigeria breached the terms of the contract, it took a legal recourse and secured an arbitral award against the country.

Nigeria has been making moves to overturn the judgement and has gotten court clearance to request documents from a P&ID stakeholder and review bank statement of former President Goodluck Jonathan, Diezani Alison-Madueke and Rilwanu Lukman, former ministers of petroleum.

The Economic and Financial Crimes Commission (EFCC), on August 18, arraigned James Nolan, a Briton, and six companies over their alleged involvement in the contract.

 

Source: Voice of Nigeria